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The Value of Political Connections in Fascist Italy — Stock Market Returns and Corporate Networks


This research project examines the value of political connections between corporate groups in Italy and the National Fascist Party (PNF) during the years of Mussolini’s rise to power (1921-1929).

How much was it worth to have close, early connections with the National Fascist Party? For the case of fascist Italy, conclusive evidence on a sizeable effect of connectedness on stock market performance would suggest a relevant involvement of big business in political developments during a key period of contemporary history. Such a finding would alert the need to perform a more careful reading of firm trajectories beyond purely neoclassical grounds, calling into question the self-adjusting character and allocative efficiency of stock markets. This project undertakes a quantitative assessment of the influence of political connectedness to the fascist regime on stock market returns at certain key historical moments in order to offer an evaluation of the performance differential in stock market returns of the companies that had substantive links with fascism.