Luigi Zingales: observation

Transcript context

…Maybe it’s how we get these scalable firms in the US that Italy is somewhat lacking, by being harsher in some ways. I always said that the perfect world is a world in which you take the best things from Italy and the best things from the United States. My dream would be to live in Italy and work in the States. The commuting is a bit complicated. I think that you’re absolutely right. I come from a region in Italy where there are a lot of family firms. What is extremely moving and depressing in this moment is, in these firms, when they go bankrupt, the owners commit suicide. It is a pretty large number of suicides today because, unfortunately, the business is not doing well. Sometimes, they leave their life insurance to pay the salary of the employees, and then they commit suicide. That’s a completely orthogonal view of the firm like we are a family. Which one is better depends on a lot of things. Depends on how much is important to transfer knowledge within the family. Italian firms specialize, or used to be specialized, in craftsmanship that is hard to teach unless you have a dedicated person transferring this. That’s the reason why they were family firms, because the parents transferred to the kids. A lot of the education in Italy is done in the family. One of the best things about Italians, for example, is that they sit down at dinner. You say, “Why so important?” I thought that everybody sit down at dinner with their family. I realized in America, a lot of people don’t sit down at dinner. When I grew up, I sit down at lunch and dinner. Today, it’s difficult, because most people are not around at lunch. There is a tradition of spending some time around the dinner table. That’s a place where you socialize, you learn, you transfer human capital from the older generation to the younger generation. I think that this is one thing that is lacking in the United States that they can learn from Italy. [In Italy] there is a tradition of spending some time around the dinner table. That’s a place where you socialize, you learn, you transfer human capital from the older generation to the younger generation. I think that this is one thing that is lacking in the United States that they can learn from Italy. You’ve written on conglomerates. One of the recent business stories is that Google will turn itself into a kind of conglomerate. The parent firm will be called Alphabet. Google will be one division. Will this matter, and if so, how?…

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