Investment Policy and Economic Performance: the Case of Italian Listed Companies

This study focuses on the investment policy of companies listed on the Italian Stock Exchange in the period between 2007 and 2013. In particular this research concentrates on the industrial and technological sectors, which have deep differences in terms of internal structure and business strategy. In fact industrial companies are likely to have a rigid structure, while the technological ones are more elastic and dynamic. This element directly influences the overall strategic focus, because technology requires firms to adapt more easily and quickly to the needs of consumers and to the aggressive policy of competitors. These views lead to different kinds of investments. In fact this research starts with the hypothesis that in the industrial sector tangible elements are much more relevant, while in the technological system intangibles are prevalent. As a consequence, there emerged the curiosity to investigate if the specific type of investments have an impact on the economic performance, in terms of operating margin (EBIT). This study bases its analysis on trends and relationships between tangibles, intangibles and operating income and they were tested empirically by analyzing the financial data extracted from consolidated balance sheets of all companies of the period between 2007 and 2013 provided by a database, called AIDA. Using the Pearson correlation ratio, the authors aimed at finding evidence of a hypothetical correlation between tangible and intangible investments and EBIT, in order to verify if they are a direct or an indirect cause affecting the trend of the economic performance.