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New data on the sources of finance for the non‐financial corporate sector show that Italian firms as a whole use more equity finance than their Anglo‐Saxon counterparts, and smaller Italian firms use equity more intensively than larger firms. Both findings can be understood in terms of the structure of industry and banking in Italy and the relations between them. Firm managers have considerable autonomy vis‐à‐vis both financial markets and intermediaries, and the Italian financial system should be seen as substantially different from either the high internal finance systems of the USA and the UK or the bank‐based system of Japan.
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