Could they grow faster? An explorative and counterfactual exercise of the Firms’ Core during the Golden Age in Italy

The firms’ size distribution in the Italian Golden age has been described as a successful example of the adoption of the big business model which is characterized by large firms able to exploit the economies of scale of the modern technologies. Two main questions are present in literature: was it enough or could have been done better? Are the two decades homogeneous? The paper tries to answer to these questions observing a panel of a Core of firms, estimating their changing of size distribution and the tendency to upsize, by the Mover-Stayer model. The upsizing of firms emerges clearly, considering the distribution among the size classes in the years 1950, 1960 and 1970, the transition matrices and directional index which shows a rate of growth more than considerable and a strong tendency to upsizing of firms in every class. Moreover, the equilibrium distribution is characterized by a relevant increase of the frequencies in the last two classes. A slowdown of the growth of the size in the last years of the second decade appears too, but the remarkable shift of frequencies on the last two classes - both of the effective and equilibrium distribution- point anyway to a success story. The difference observed in the equilibrium configuration according to 1960-1970 decade, shows a stronger shift of frequencies on the right of the distribution and it seems to confirm the traditionally observed effect of a more selective industrial policy at sectorial level - in the second part of the Sixties - than to an early presence of the perverse effect of intrusive policy in management.