Descriptive Statistics

mere instrument of control of the largest shareholder. Hence in this case it might be very difficult to provide a strong prediction on which the outcome will be.

Dummy variables: apart for the dummies for the identity of the main owner, additional dummy variables have been included in all the regression. The first are the dummy variables for time (yeardummyX) accounting for time effects and the second one are the dummy accounting for the industrial sector of the firm (twosectorX). The second dummy has been calculated by on the data obtained trough the SIC2 code classification.

Previously in the text it was explained the characteristics of the Italian Capitalism, characterized by a high degree of ownership concentration. The results showed in Table 2 provide a further remark on these evaluations by presenting the descriptive statistics of the ownership concentration variables (shrdir1, shrdir2 and shrdir3).

Table 2. Descriptive statistics on the ownership concentration

variable min max p50 mean sd N

shrdir1 .17 100 50,1 44,47951 23,94 975

shrdir2 .16 96,7 17,09 26,7289 21,9768 854

shrdir3 .02 88,49 7,41 11,80,96 12,58,57 741

As shown by the results of the descriptive statistics, the mean of the stake in the firm of the first three shareholders is major then 10. In particular, as expected the mean of the first shareholders’ ownership percentage is significantly higher than the others (44,47 percent).

However also the mean percentage of the second and third largest shareholder’s is considerably high (respectively 26,72 and 11,8 percent). Hence the above-cited studies on the ownership concentration characteristics of the Italian capitalism provided by the researchers are strongly confirmed also on this brief analysis.

Furthermore, although being very a very simplistic analysis, examining the number of observations N it is noticed a decrease. In particular: the highest frequency is noticed in the number of the observations regarding the first shareholder, then the number decreases for the second and even more for the third. A basic analysis of this examination suggests that in some Italian listed firms the presence of the second and, especially, the third shareholder (with an ownership stake higher than 3%) is not always present (or verifiable). The weakness of this elementary analysis although relies on the fact that it might occur that the difference in the number of the observation is brought by the lack of data in the initial source of data, the Orbis database.

A further remark of the high degree of ownership concentration characterizing the Italian Capitalist system is provided by Table 3, which shows how many firms of the sample are characterized by an ownership degree higher or equal to the 50%. From the data of the sample

it has been possible to show that during a period of five years 494 observations out of 971, meaning the 50,88 percent of the firms of the sample are characterized by a majority shareholder owning 50% or more of the company. This is a further confirmation of the fact that, differently for common law countries, in Italy the mostly adopted system involves the presence of an ultimate owner having the control power of the company.

Moreover considering the previous description of the Italian Capitalistic system and combined with the theory explained above in the text about the pyramidal system. These numbers confirms that the half of the Italian industrial listed companies have an owner controlling the at least 50% of the group. Thus, although in an indirect form (in fact no pyramidal groups analysis was provided), the combination of this information and the theory provided by the researchers confirms the fact that Italian corporate structure is mainly based on a highly concentrated ownership.

Table 3: Shareholder presence owning 50 percent of more of the shares

majority* Freq. Percent Cum.

0 477 49,12 49,12

1 494 50,88 100

Tot. 971 100

*majority variable has been created by giving a value of 1 if the value of shrdir1 was major of equal to 50 and 0 in case it was minor. Subsequently it was asked to calculate frequency and percentage of the values.

The last descriptive statistics Table aims to analyze the accounting template of the first shareholder. Specifically it was calculated the frequency and percentage of the various types of firms whenever they were the first shareholder.

Table 4: Frequency and percentage of first shareholder’s nature

Freq. Percent

firstshtype1 383 39,2

firstshtype2 276 28,25

firstshtype3 170 17,4

firstshtype4 23 2,35

firstshtype5 39 3,99

firstshtype6 38 3,89

firstshtype7 19 1,94

firstshtype8 6 0,61

firstshtype9 14 1,43

firstshtype10 5 0,51

firstshtype11 3 0,31

firstshtype12 1 0,1

tot 977 99,98

Firstshtype1=industrial company; 2=one or more named individual or families; 3= financial company;

4=Mutual & Pension Fund/Nominee/Trust/Trustee; 5=Public authority, State, Government; 6=Bank; 7=

Private Equity companies; 8= Self Ownership; 9=Public (Publicly listed companies); 10=Insurance company;

11= Foundation/ Research Institute; 12=Venture Capital

As expected, industrial companies and families are the most common major shareholder type.

This provides a further proof of the previous analyses conducted on Italian Capitalism.

Families and groups are the most common category as major shareholder with respectively the 28,25% and the39,20% of the observations: thus it is possible to state that pyramidal groups and family business, also in listed companies, are still nowadays the most common way to organize the governance of the companies.

A further remark has to be made by the percentage of listed companies having the State as the ultimate controller. In fact the obtained data shows that differently from the previous 1990s era, where State’s presence as major shareholder was heavy and diffused, the privatization policy adopted by the beginning of the 1990s led to a slight decrease of the State-Owned enterprises among listed companies. In fact only the 3,99% of the sample’s observations are companies run by the State as the major shareholder.

Being the first shareholder only in the 2,35% of the observations, banks cannot be considered as a usual majority shareholder of the Italian listed firms. This brings the discussion on the comparison between Italian and the of the main corporate governance systems of Continental Europe: the German system. In fact the fact that only few banks are the major shareholders of industrial companies highlights how differently Italian and German market developed during the years. In fact while in Germany banking system is still enforce and the main bank is the centre of the business groups, in Italy banks are still mainly a source of finance in forms of loans, but not with equity. Hence it appears that although the 1936 law prohibiting banks to have equity stakes in industrial firms has been modified, banks reluctantly undertake operations aiming to purchase significant equity stakes allowing them to control the firm.

The last comment has to be made on financial firms as the first shareholder (17,4%). As explained before in the text, these companies are mainly holdings located abroad which has to role of controlling the firm for the final owner of the company, which is usually a family or an individual.

As expected the other considered categories do not have a significant percentage of ownership allowing providing relevant comments.