Expansion and access to the markets entail potentially significant transparency costs owing to increased visibility (to the tax authorities, to regulators, to minority shareholders), an excessive tax burden, a plethora of inefficiently applied rules and regulations, and the poor flexibility of the goods and labour markets.3 One consequence of the small average size of Italian firms is low demand for such financial services as listing assistance, securities issues, and syndicated loan placement.
These are services that are used heavily by large corporations but very little by small firms, which are inherently less transparent, have few shareholders and are generally not present in the capital markets.