Academic journal article Journal of Financial Management & Analysis

Financial Management Focus on Globalization of the Italian Manufacturing Industry through "Distretti Industriali"

Academic journal article Journal of Financial Management & Analysis

Financial Management Focus on Globalization of the Italian Manufacturing Industry through "Distretti Industriali"

Article excerpt

Introduction

In a globalised market a careful analysis of the critical factors necessary to create a successful enterprise is becoming more and more important. Many enterprises, successful at home, show their deficiencies abroad, because they don't analyse their structure, their financial potential, their targets. Before beginning the abroad adventure, it is really important to analyse some critical elements, that can be considered the ingredients of the formula of success in every context:

* the market of reference with the relationship between supply and demand;

* the competitive position towards other enterprises operating in the same sector;

* the inside flexibility and, in particular, the capacity of replacing fixed costs with variable ones;

* the strengthening of the investments in Research & Development to be always in the van;

* the sensitivity towards the incre~ing changes in demand and, in particular for Italian enterprises, the understanding that the new reference market has larger boundaries: Europe first, then the rest of the world

* the monitoring of financial, social and political threats of a foreign country, that is the basis of reports released by agencies, like Moody's or S & P's: their ratings about the reliability of a country are a reference mark for international investors, in particular if interested in high riskcountries.

For the more stable countries, as the European Union's ones, another important mark is the analysis of particular indexes about enterprises' confidence in buying abroad: the analysts interview the purchase managers of several firms to understand their propensity to invest in a particular country, focusing attention on important sectors, just as the construction, the wholesale and retail purchases or the manufacturing activities. From the analysis of these surveys, it is possible to create interesting and usefull indexes, as the French "In see" or the German "Ho". These indexes can be often with the mark "PMI", that stands for "Purchase Management Index".

These figures well show the common trend of two of the major European countries: in both cases there are two great falls in the period April 1995. April 1996 and again April 1999, when the European financial markets were shocked by important manoeuvrings in taxes, that reduced the propensity to the international risk.

Increasing Competition Among EU Countries Integration through a Singular Payment System

The increasing competition among EU countries will, however, stimulate organisational and financial improvèment so that every national economy will enforce its strength points: Italy, for instance, will be able to benefit from its peninsular position as an EU "bridge" towards the Mediterranean Sea, will be able to share with the other countries its technical know-how and, at the same time, will be able to take advantage of other economies' knowledge. The best integration among different economic systems is also guaranteed by the integration among the respective financial intermediaries.

EU member-countries, for instance, have decided to integrate the different money markets through a singular payment system called "TARGET" (Trans-European Automated Real-time Gross settlement Express Transfer). The Italian interface to this European system is called BI REL (whose initials stand for "Banca d'Italia REgoimnento al Lordo", that is "Bank of Italy Gross Settlement"). This technological innovation assures real-rime connections, money circuit velocity and good cost-effectiveness. The global success of a single European market really depends on the degree of homogeneity and strong relationship among the different countries, that have to increase their mutual exchanges and their opening to foreign markets optimising the imports and strengthening the exports (see Table 1).

The table below present the values of all the "BURO 15" countries belonging to the European Union, including the 11 countries of the EMU (European Monetary Union) and the four which countries have decided to stay temporarily out of tile EURO (Denmark, Greece, Sweden, United Kingdom). …

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