Large Firms and Southern Italy: The Relevance of Salvatore Cafiero’s Position

TLDR: In this article, the authors argue that large firms can still play a significant role in the development of Southern Italy, arguing that the production of supply externalities in areas dominated by the large firms and the presence of economies of scale in the international projection of firms.

Abstract: In this paper we argue that large firms can still play a significant role in the development of Southern Italy. It is an argument that had already been advanced by the Neo-Meridionalistiin the ’50s and ’60s and that was also upheld by Salvatore Cafiero, even in the new background of ideas and policies. In support of this stance, two aspects are discussed in the paper: the production of supply externalities in areas dominated by the large firms and the presence of economies of scale in the international projection of firms. We then go on to consider the efficiency of Planning Agreements. Designed to foster the localization of large firms in Southern Italy, this policy measure is unfortunately found to have somewhat departed from the original principles.