We estimate the risk-adjusted performance of Italian equity funds, using both net and gross returns (i.e., net returns plus management fees), employing single factor and multifactor benchmarks. With net returns, the funds' performance is not significantly different from zero. With gross returns, however, the performance is always positive, even when we use benchmarks which take account of the non-equity investments of the funds and measures which are not influenced by the market timing behavior of the portfolio managers. Our evidence supports the Grossman and Stiglitz's view of market efficiency, suggesting that informed investors are compensated for their information gathering.

The general conclusion of the empirical literature is that in-market consolidation generates adverse price changes, harming consumers. Previous studies, however, look only at the short-run pricing impact of consolidation, ignoring effects that take longer to materialize. Using a database that includes detailed information on the deposit rates of individual banks in local markets for different categories of depositors, we investigate the long-run price effects of mergers. We find strong evidence that, although consolidation does generate adverse price changes, these are temporary. In the long run, efficiency gains dominate over the market power effect, leading to more favorable prices for consumers.

Using a large database of private firms in Italy, we analyze the determinants of initial public offerings (IPOs) by comparing the ex ante and ex post characteristics of IPOs with those of private firms. The likelihood of an IPO is increasing in the company's size and the industry's market‐to‐book ratio. Companies appear to go public not to finance future investments and growth, but to rebalance their accounts after high investment and growth. IPOs are also followed by lower cost of credit and increased turnover in control.