ABSTRACT
Introduction In continental Europe, the advent of railways, public utility companies and other capital-intensive industries took place from the mid-nineteenth century onwards as the progressive diff usion of a new wave of innovations, characterizing and giving shape to the energetic and technological paradigm known as the second industrial revolution. Th e affi rmation and consolidation of this new paradigm stemmed from imitation and adoption of the new technologies throughout European industrializing countries, fostering convergence in the long run both in their economic and social structures, and eventually in income. Such a process, nevertheless, required the adoption of a fi nancial innovation, which appeared around the 1850s and consolidated in the following decades, the joint-stock investment bank. As pointed out by a vast literature on economic development, starting from Gerschenkron’s works, these banks were able to mobilize and rise large amounts of capital, and to allocate it to those ‘new combinations of means of production’ – the (big) business enterprises – characterized by high capital intensity, diff ered profi tability and high degree of risk. Moreover, by creating and issuing tradable securities representing those investments and by organizing secondary markets wherein to trade them, the new banks increased industrial assets’ liquidity, thus enhancing investors’ willingness to buy and to hold them. Incorporated investment banks had oft en a common origin and fulfi lled the same functions in continental Europe, starting a fi nancial revolution and fostering both fi nancial and industrial growth in second-or late-coming countries.1 Th is notwithstanding, while a certain degree of economic convergence can be observed in those countries as their growth went on, it seems to be questionable that their fi nancial systems, and especially their fi nancial intermediaries, experienced that same degree of convergence. Th e observation of their structures, organization and activities suggests, in fact, that these investment banks were
not all the same, but that they oft en adopted diff erent patterns and degrees of specialization.
