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Multinationals and Economic Development in Italy during the Twentieth Century

  • Andrea Colli


As a host country for foreign direct investment, conventional measures suggest that Italy is not a very attractive location. However, based upon a new database of the one hundred largest multinationals in the country, this article shows that foreign firms consistently played a crucial role in Italy's industrial activities throughout the twentieth century. A detailed analysis of investment patterns, distribution across industries, and entry modes reveals that they concentrated their investment in sectors of high technological and scale intensity, such as chemicals and pharmaceuticals, where domestic capabilities and competition remained weak during much of the period.



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1 Amatori, Franco and Colli, Andrea, Impresa e industria in Italia: Dall'Unità ad oggi (Venice, 2000).

2 See chapters in part 1, Big Business: Catching Up the Technological Frontier,” in Forms of Enterprise in Twentieth Century Italy: Boundaries, Structures and Strategies, ed. Colli, Andrea and Vasta, Michelangelo (Cheltenham, 2010).

3 Amatori, Franco, Bugamelli, Matteo, and Colli, Andrea, “Italian Firms in History: Size, Technology and Entrepreneurship,” Quaderni di storia economica [Economic History Working Papers] 13, Bank of Italy, Economic Research and International Relations Area, 2011; also published in The Oxford Handbook of the Italian Economy since Unification, ed. Toniolo, Gianni (Oxford, 2013).

4 Gerschenkron, Alexander, Economic Backwardness in Historical Perspective: A Book of Essays (Cambridge, Mass., 1962); Amatori and Colli, Impresa e industria in Italia.

5 Amatori, Franco, “Entrepreneurial Typologies in the History of Industrial Italy: Reconsiderations,” Business History Review 85, no. 1 (2011): 158 and Entrepreneurial Typologies in the History of Industrial Italy (1880–1960): A Review Article,” Business History Review 54 (1980): 359–86.

6 United Nations Conference on Trade and Development, “Foreign Direct Investment Flows and Stock,” 2010, available at:,5&sRF_Expanded=,p,5.

7 Fabrizio Onida, Sergio Mariotti, and Lucia Piscitello, “Foreign Ownership: The Case of Italy,” CESPRI: Centro di Ricerca sui Processi di Innovazione e Internazionalizzazione, Working Paper 143, June 2003.

8 The Database, named FOR_IMITA.DB has been built combining existent information on Italian joint-stock companies with extensive archival research. The result is a dataset containing information about the largest one hundred companies under foreign control for eight benchmarks during the twentieth century, with information concerning share capital, total assets, country of origin, sector of activity, year of entry, and entry strategy.

9 Vernon, Raymond, “International Investment and International Trade in the Product Cycle,” Quarterly Journal of Economics 80 (May 1966): 190207, in particular 196–98.

10 Dunning, John, Studies in International Investment (London, 1970); Vaupel, James and Curhan, Joan P., The World's Multinational Enterprises: A Sourcebook of Tables Based on a Study of the Largest U.S. and Non-U.S. Manufacturing Corporations (Geneva, 1974); Dunning, John, “The Eclectic Paradigm of International Production: An Update and Possible Extensions,” Journal of International Business Studies 19 (1988): 131.

11 Dunning, John, “Location and the Multinational Enterprise: A Neglected Factor?Journal of International Business Studies 29, no. 1 (1998): 4566, in particular 47ff.; Cantwell, John, Technological Innovation and Multinational Corporations (Oxford, 1989); Agarwal, Sanjeev and Ramaswami, Sridhar N., “Choice of Foreign Market Entry Mode: Impact of Ownership, Location and Internalization Factors,” Journal of International Business Studies 23, no. 1 (1992): 127; Cantwell, John, “Location and the Multinational Enterprise,” Journal of International Business Studies 40, no. 1 (2009): 3541, esp. 36.

12 Wilkins, Mira, “Comparative Hosts,” Business History 36, no. 1 (1994): 1850, esp. 25–26.

13 Ibid., 27. Wilkins proposed a fifth parameter, the “corporate,” which frames the location decision in the context of the “factors distinctive to a particular enterprise.” I excluded it from my analysis, because it does not address the interaction between the host economy and the investing company.

14 Ibid., 25.

15 Jones, Geoffrey, Multinationals and Global Capitalism: From the Nineteenth to the Twenty-First Century (Oxford, 2005), 27.

16 U.S. Department of Commerce, Office of Business Economics, U.S. Business Investments in Foreign Countries in 1936 (New York, 1936).

17 See Toninelli, Pier Angelo, “Between Agnelli and Mussolini: Ford's Unsuccessful Attempt to Penetrate the Italian Automobile Market in the Interwar Period,” Enterprise and Society 10, no. 2 (2009): 335–75.

18 Decree 43, a law about foreign investments, was issued on February 7, 1956 after a first but less organic attempt in 1948 (Decree 211, March 2, 1948). The conditions for establishing a production facility in Italy were generally considered fully satisfactory, particularly for U.S. companies for which some archival evidence is available. See “Checklist for Investigating Foreign Operations,” addendum to letter 21907, “Visita di industriali statunitensi,” Historical Archives of the Istituto Mobiliare Italiano in Rome (AS IMI), International Investment Office (IIO), 91. See, also, the (more critical) “Memorandum. Business International. Riunioni esecutive Italo-Americane. Roma-Milano 14–18 ottobre 1957,” AS IMI, IIO, 271. Other institutions, such as the Bank of Italy, shared the idea of providing stimuli for foreign investments. See “Investimenti di capitali esteri in Italia e loro incidenza sullo sviluppo economico del nostro Paese,” Banca d'Italia, Ufficio Studi, 282, f. 2, sf. 1, Bank of Italy Historical Archives, Rome (ASBI). See also, “Questionario sugli investimenti internazionali,” Carte Caffè, 1, f. 1, and “Investimenti stranieri in Italia ed Italiani all'Estero,” Carte Caffè, 71, f. 6., ASBI.

19 Central Italy includes Tuscany, Umbria, the Marshes, Latium, and Abruzzi; Southern Italy includes Campania, Calabria, Puglia/Apulia, Molise, Basilicata, Sicily, and Sardinia.

20 The Second Industrial Revolution here is meant as the wave of technological innovations in the fields of energy, chemicals, oil refining, food processing, and metallurgy based upon energy- and scale-intensive processes that diffused among industrialized countries starting in the last two decades of the nineteenth century.

21 Pozzi, Daniele, “Entrepreneurship and Capabilities in a ‘Beginner’ Oil Multinational: The Case of ENI,” Business History Review 84 (2010): 253–74.

22 De Grazia, Victoria, Irresistible Empire: America's Advance through Twentieth Century Europe (Cambridge, Mass., 2005).

23 Wilkins, “Comparative Hosts,” 26.

24 Jones, Geoffrey, The Evolution of International Business: An Introduction (London, 1996), 51.

25 Vaupel and Curhan, The World's Multinational Enterprises; Franko, Lawrence, The European Multinationals: A Renewed Challenge to American and British Multinationals (Greylock, 1976).

26 Wilkins, Mira, The Maturing of Multinational Enterprise: American Business Abroad from 1914 to 1970 (Cambridge, Mass., 1974); Bonin, Hubert and de Goey, Ferry, eds., American Firms in Europe, 1880–1980: Strategy, Identity, Perception and Performance (Geneva, 2009).

27 Wilkins, The Maturing of Multinational Enterprise, 318ff.; U.S. Senate, Special Committee Investigating Petroleum Resources, American Petroleum Interests in Foreign Countries (New York, 1976), 392–93.

28 Servizio Studi del Senato della Repubblica, Ufficio di documentazione e ricerche, Gli investimenti esteri diretti in Italia (Rome, 1978).

29 Amatori, “Entrepreneurial Typologies in the History of Industrial Italy: Reconsiderations,” 167–71; Bussolati, Camillo, Malerba, Franco, and Torrisi, Salvatore, L'evoluzione delle industrie ad alta tecnologia in Italia: Entrata tempestiva, decline e opportunità di recupero (Bologna, 1996).

30 Amatori, “Entrepreneurial Typologies in the History of Industrial Italy: Reconsiderations,” 166.

31 Organisation for Economic Cooperation and Development (OECD), Reviews of Foreign Investments: Italy (Paris, 1994), 26ff. and 36ff.

32 Consiglio Nazionale dell'Economia e del Lavoro, “Italia Multinazionale 2000,” Rome, April 2002, 133; Affinito, Massimiliano, De Cecco, Marcello, and Dringoli, Angelo, Le privatizzazioni nell'industria italiana (Rome, 2000).

33 Solimene, Laura, “La SIV e l'industria del vetro piano: Strategie di entrata e controllo della tecnologia,” Annali di Storia dell'Impresa 11 (2000): 475526.

34 La Ricerche e Studi (R&S), “Le privatizzazioni in Italia dal 1992,” Milan, undated. Available at:

35 Investments in mining were mainly concentrated in minerals such as bauxite, mercury, sulfur, or fossil fuels such as lignite.

36 Fari, Simone and Giuntini, Andrea, “Public Utilities in the Twentieth Century,” in Forms of Enterprise in Twentieth Century Italy: Boundaries, Structures and Strategies, ed. Colli, Andrea and Vasta, Michelangelo (Cheltenham, 2010), 185203, esp. 191.

37 Wilkins, The Maturing of Multinational Enterprise, 318ff. According to Wilkins, both in 1929 and in 1940, the book value of U.S. foreign investments in refining, drilling, and extraction in Europe was one-third of the world total. The data of the survey in Sammons, Robert L. and Abelson, Milton, American Direct Investments in Foreign Countries: 1940 (Washington, D.C., 1942), show that at the beginning of World War II, the highest number of U.S. direct investments in Europe could be found in chemicals, oil, and machinery (pp. 21, 130, 117, 87). The database on which this research is based takes into account only investments in manufacturing and not those in marketing and distribution.

38 Amatori, Franco and Bezza, Bruno, eds., Montecatini, 1888–1966: Capitoli di storia di una grande impresa (Bologna, 1990); Zamagni, Vera, “The Rise and Fall of the Italian Chemical Industry (1950s–1990s),” in The Global Chemical Industry in the Age of the Petrochemical Revolution, ed. Galambos, Lou, Hikino, Takashi, and Zamagni, Vera (Cambridge, U.K., 2007).

39 Garrone, Paola, Mariotti, Sergio, and Sgobbi, Francesca, “Technological Innovation in Telecommunications: An Empirical Analysis of Specialisation Paths,” Economics of Innovation and New Technology 11 (2002): 123.

40 Wilkins, Mira, The History of Foreign Investments in the United States to 1914 (Cambridge, Mass., 1989); Dunning, John, American Investments in British Manufacturing Industry (revised and updated edition) (London, 1998); Bostock, Frances and Jones, Geoffrey, “Foreign Multinationals in British Manufacturing, 1850–1962,” Business History 36, no. 1 (1994): 84126.

41 Jones, Geoffrey and Bostock, Frances, “U.S. Multinationals in British Manufacturing before 1962,” Business History Review 70, no. 2 (1996): 207–56.

42 Schröter, Harm, “Continuity and Change: German Multinationals since 1850,” in The Rise of Multinationals in Continental Europe, ed. Jones, Geoffrey and Schröter, Harm (Cheltenham, 1993), 2848; von Oswald, Anne, “L'industria tedesca in Italia dall'età giolittiana alla seconda guerra mondiale,” Archivi e Imprese 10 (1994): 3472. The figures for Italy are strikingly homogeneous with those provided for Britain by Bostock and Jones, “Foreign Multinationals.” Apart from the British figures, those for other countries of origin coincide perfectly with those mentioned in Nitti, Francesco Saverio, Il capitale straniero in Italia (Naples, 1915) and with those provided by Stringher, Bonaldo, “Su la bilancia dei pagamenti fra l'Italia e l'estero,” Riforma Sociale 1 and 2 (1912), mentioned in Zamagni, Vera, Industrializzazione e squilibri regionali in Italia (Bologna, 1978), 145.

43 Dumoulin, Michael, “Les contradictions de l'espansion à la ‘Belle Epoque,’” in Présences Belges dans le monde a l'aube du XXe siècle, ed. Dumoulin, Michael (Louvain-la-Neuve-Bruxelles, 1989), 1415. See also Devos, Greta, “Agfa-Gevaert and Belgian Multinational Enterprise,” in The Rise of Multinationals in Continental Europe, ed. Jones, and Schröter, , 201–12.

44 U.S. Department of Commerce, American Direct Investments in Foreign Countries (Washington, D.C., 1930), 39 and Table 7, 40. According to the U.S. Department of Commerce survey, U.S. capital was largely present in manufacturing, oil, and electricity.

45 Jones, Geoffrey and Schröter, Harm, eds., The Rise of Multinationals in Continental Europe (Cheltenham, 1993), 13ff.; Tolentino, Paz Estrella, Multinational Corporations: Emergence and Evolution (London, 2000), ch. 1; 330. Schröter, “Continuity and Change”; Schröter, Harm, “Swiss Multinational Enterprise in Historical Perspective,” in The Rise of Multinationals, ed. Jones, and Schröter, , 4965.

46 See U.S. Department of Commerce, Office in Business Economics, U.S. Business Investments in Foreign Countries (New York, 1976); U.S. Department of Commerce, American Direct Investments, 9. On American investments in Italy after 1945, see Segreto, Luciano, “Gli investimenti americani in Italia (1945–1963),” Studi Storici 37 (1996): 273316. A similar dynamic is reported for Britain. See Jones and Bostock, “U.S. Multinationals in British Manufacturing.” “Dato da Morgante il 2.6.61,” AS IMI IIO, 271.

47 Dunning, “Location and the Multinational Enterprise,” 51ff.

48 This is true also for other peripheral European countries. See, for example, Peter Sorensen and Tarbensen, Kenn, “U.S. Investments in Denmark, 1945–1972: An Overview with Focus on Motives and Attitudes,” in American Firms, ed. Bonin, and de Goey, , 229–82.

49 Hennart, Jean-Francois and Park, Young-Ryeol, “Greenfield vs. Acquisition: The Strategy of Japanese Investors in the United States,” Management Science 39 (1993): 1054–70. Jones and Bostock, “U.S. Multinationals in British Manufacturing,” 229.

50 OECD, Reviews of Foreign Investments: Italy, 14.

51 Freestanding companies include those running direct investments only outside the country of incorporation, which was basically acting as a source of capital for the investments. Thus, an existing, consolidated presence in the country of origin did not precede their international activity, contrary to the dominant model of the modern multinational corporation. See Wilkins, Mira and Schröter, Harm, eds., The Free-Standing Company in the World Economy (Oxford, 1998); Hertner, Peter, “Free Standing Companies in Italy, 1883–1912,” in The Free-Standing Company, ed. Wilkins, and Schröter, , 151–60.

52 Under the control of Union Elektrizitäts Gesellschaft (UEG) from its foundation in 1898. See De Boeck, Anne, “La Sofina (Société financière de transports et d'entreprises industrielles), 1898–1914,” in Présences Belges dans le monde a l'aube du XXe siècle, ed. Dumoulin, , 2140. German global leaders in the electromechanical industry incorporated share ownership in infrastructure-building companies in Belgium because the logic of vertical integration was a diffuse practice. See Hertner, Peter, “German Multinational Enterprise before 1914: Some Case Studies,” in Multinationals: Theory and History, ed. Hertner, Peter and Jones, Geoffrey (Aldershot, 1986), 113–34, and Dumoulin, “Les contradictions de l'espansion à la ‘Belle Epoque,’” 16; Dumoulin, Michael, Les relations économiques italo-belges (1861–1914) (Brussels, 1990).

53 International Western Electric became International Standard Electric after its acquisition by ITT in 1925. Wilkins, The Maturing of Multinational Enterprise, 70, 71, and 147.

54 Olsson, Ulf, “Securing the Markets: Swedish Multinationals in Historical Perspective,” in The Rise of Multinationals, ed. Jones, and Schröter, , 99127, esp. 103ff.; Tolentino, Multinational Corporations, 80ff. See also Attman, Artur and Olsson, Ulf, L. M. Ericsson: One Hundred Years, vol. 2, Rescue, Reconstruction, Worldwide Enterprise, 1932–1976 (Orebro, 1977).

55 Wilkins, The Maturing of Multinational Enterprise, 77.

56 Hennart and Park, “Greenfield vs. Acquisition,” 1055–56; Jones and Bostock, “U.S. Multinationals in British Manufacturing,” 229.

57 As in the case of Tecnomasio Italiano, an electromechanic firm acquired by the Swiss Brown Boveri in 1898, three decades after its foundation in 1871. Brown Boveri took over the company in order to enter the Italian market as a supplier of railway electric engines before the nationalization of the network in 1905 to meet the future orders from the state railways. Stefania Licini, “Ercole Marelli e Tecnomasio italiano, dalle origini agli anni Trenta: Un tentativo di comparazione,” in Annali di storia dell'impresa 5–6 (1989–90).

58 Cova, Alberto, Economia, lavoro e istituzioni nell'Italia del Novecento (Milan, 2002), 531; on International General Electric in the interwar years, see Wilkins, The Maturing of Multinational Enterprise, 65ff.

59 Marco Bertilorenzi, “La méthode Saint Gobain: Strategia di un'impresa multinazionale in Italia, 1887–1939,” M.Sc. thesis, University of Florence, 2006.

60 Sánchez, Esther, “Un siglo de vidrio francés: Saint Gobain en España, de 1905 a la actualidad,” Investigaciones de Historia Económica 7 (2011): 395407.

61 Hertner, “German Multinational Enterprise before 1914,” 122–23.

62 Amatori, Franco, “Montecatini: Un profilo storico,” in Montecatini, 1888–1966, ed. Amatori, and Bezza, , 1968.

63 Zamagni, Vera, “L’industria chimica italiana dalle origini agli anni ’50,” in Montecatini, 1888–1966, ed. Amatori, and Bezza, , 69149.

64 Rispoli, Maurizio, “L'industria dell'alluminio in Italia nella fase di introduzione: 1907–1929,” Annali di Storia dell'Impresa 3 (1987): 279322. Senato della Repubblica, V Legislatura, 32esima seduta pubblica. Resoconto Stenografico, 11 Oct. 1968, 1799.

65 This is in some ways similar to the concept of “political” international investment activity suggested for the Spanish case by Puig, Núria and Castro, Rafael, “Patterns of International Investment in Spain, 1850–2005,” Business History Review 83, no. 3 (2005): 505–37.

66 Pozzi, “Entrepreneurship and Capabilities in a ‘Beginner’ Oil Multinational,” 253–74.

67 The Investment Development Path theory provides a formalization of this process, linking the nature of foreign investment activity (inward, and also outward) to the stage of development of a country's economy. See Dunning, John H. and Narula, Rajneesh, “The Investment Development Path Revisited: Some Emerging Issues,” in Foreign Direct Investments and Governments: Catalysts for Economic Restructuring, ed. Dunning, John H. and Narula, Rajneesh (London, 1996), 140.

68 Bonin, Hubert, “First American Firms Coming to France (from the 1900s to the 1930s),” in American Firms, ed. Bonin, and de Goey, , 71103, esp. 102; Álvaro-Moya, Adoración, “Foreign Direct Investment, Economic Aid and Modernization: U.S. Firms in Spain (1920–1975),” in American Firms, ed. Bonin, and de Goey, , 209–28, esp. 227.

69 See Sorensen and Tarbensen, “U.S. Investments in Denmark,” 229–79.

70 Gerschenkron, Economic Backwardness; Amatori and Colli, Impresa e industria in Italia.

71 Pearce, Robert, “China and the Multinationals,” in China and the Multinationals: International Business and the Entry of China into the Global Economy, ed. Pearce, Robert (Cheltenham, 2011), 123.

The author is indebted to Matthias Kipping for his advice and suggestions. He also wishes to thank the two anonymous referees for their critiques and comments. The usual disclaimer applies.

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Multinationals and Economic Development in Italy during the Twentieth Century

  • Andrea Colli


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