Major public enterprises in Italy

Italian State-owned enterprises (SOEs) continue to occupy a strategic position in the national economy. In 2013, their aggregate value added was equal to 17% of the Italian national GDP, and they counted for around 40% of the total Italian stock market capitalization. The present paper focuses on the top ten Italian SOEs over the period 2004-2013. A first overview of the changes in their internal and external environment suggests the crucial importance of institutional conditions and the lack of a coherent policy design for privatisation and regulation, as the timing and the intensity of the reforms has varied deeply among sectors. Nevertheless, contemporary Italian SOEs have been increasingly exposed to market incentives, and they seem nowadays more oriented to markets than to public values, with some remarkable divergences depending on the degree of public control and market liberalization. Our textual analysis of the SOEs’ statutes reveals a total absence of direct references to a formal public mission. Social goals have been increasingly addressed by means of regulation, while only Ferrovie dello Stato and Poste Italiane are formally subject to the Universal Service Obligation. We also find that, on average, the management and performance of the Italian SOEs has improved and it holds the comparison with private and public European industry peers. Still, remarkable differences across markets and across sectors persist. Listed SOEs are largely profitable and distribute positive dividends to their shareholders. Among them, Eni, Enel and Finmeccanica have expanded their business internationally, though cross-border M&As. As a result, a high share of their revenues and employees originates out of Italy. This suggests that their strategies are no more committed to political goals, such as employment protection. Conversely, other SOEs are somehow compelled to maintain an informal public mission. Unlisted SOEs that provide universal services often incur in economic losses which are partly covered by public subsidies or by taxpayers.Nevertheless they also have modernized their management and expanded into new profitable markets, such as high speed train (FS) and financial and insurance services (Poste Italiane). SOEs managing networks have invested in national strategic infrastructures and their employees and revenues are largely domestic-based. Finally, aggregate data do not reveal strong divergences among the Italian SOEs and their industry peers in terms of employment policies and labor productivity, with some important divergences among SOEs operating in labor-intensive and capital-intensive sectors. In terms of investments in fixed assets we observe divergences among SOEs and private ones. The former have increased their investments in tangible assets over time, while investments by private industry peers have been negatively affected by the financial crisis.