Home Center: “Mario Arcelli” Research Center for Monetary and Financial Studies
 

The research activities of the Observatory on Finance for SME Growth focus on the growth in size of companies as a phenomenon that requires different combinations of financial instruments to support them throughout their entire life cycle. 

The goals of these activities include identifying the main drivers that, at different times, determine appropriate financial structures in terms of the availability and cost of funding sources. The study methodology, on the other hand, relies on applying theoretical models from corporate finance and industrial organization, as well as econometric techniques tailored to harness the vast amount of data now available, both cross-sectionally and in time series. Analytical tools typical of experimental economics and behavioral finance can also be employed. 

The research topics to be addressed will focus on identifying the obstacles—both on the demand and supply sides of capital—that have led to the well-known undercapitalization of Italian companies. This issue also extends to other European countries, albeit with some distinctive characteristics, particularly in terms of a deep and liquid capital market. 

These aspects have already been addressed in several studies by the Center, conducted in partnership with financial firms and trade associations. They have contributed to the current lively debate, which has been fueled more recently by the dissemination of the “Draghi Report” and the “Letta Report” in Europe, as well as by statements from President Lagarde regarding the advisability of further integrating capital market supervision, which remains fragmented across individual member states. It's a fact that the Capital Markets Union, now ten years in existence, has not materialized and has not met initial expectations. European markets remain “small” compared to those in other financial centers, tempting companies seeking “efficiency” and “liquidity” to list elsewhere, very often in the U.S. The problems affect the entire corporate finance ecosystem, particularly innovation finance (angel investors, venture capital, and thematic funds). As a result, Europe consistently lags behind the US, Israel, Korea, China, and parts of India, with rare exceptions in Northern European countries and Switzerland. 

In this regard, the Observatory aims to institutionalize and expand the existing activities within the “Mario Arcelli” Research Center for Monetary and Financial Studies on these topics. This will strengthen the University’s participation in the ongoing national and European debate on how to best advance financial market integration and direct finance to serve the real economy.

This calls for the involvement of private savings and the resources of institutional investors, streamlining and enhancing the incentive tools and guarantees used to date. The aim is to achieve the best possible domestic-European mix, aligning with the objectives of the various stakeholders involved. While the Observatory primarily focuses on non-bank finance, banks play a crucial role in shaping efficient financial structures that support growth in scale. On the contrary, structured partnership initiatives should be identified and promoted between the banking system and capital markets—both public and private, liquid and non-liquid—so that they can best complement, rather than merely replace, each other in providing financial resources.