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AbstractThe privatization of public utilities marked a turning point in European capitalism, reshaping the relationship between the public and private spheres of the economy. However, the extent of state disinvestment varies greatly from country to country. While in some countries direct state ownership has disappeared, in others the state still acts as a reference shareholder in strategic companies. Despite their institutional similarities, Italy and Spain provide a puzzling example of this divergence. While Spain completed the privatization of all public utilities, the Italian state retains a controlling stake in many of them. Through historical case studies based on official documents, legal texts, archival research of newspaper articles, secondary sources and memoirs, this paper explains this divergence. Contributing to recent debates on patient capital and state-business interactions, it is argued that Spain completed the privatization process because the state was able to orchestrate the creation of shareholder alliances among private investors. Crucially, these investors were willing to ensure that management prioritizes long-term investment plans over the distribution of short-term financial profits. In the absence of domestic private providers of patient capital, the Italian state had to keep the role of anchor investor for itself after unsuccessfully experimenting with various privatization strategies. [ABSTRACT FROM AUTHOR]

Contributing to the debate on the state's role in helping domestic firms to internationalise, this paper compares the divergent performance of the Italian and Spanish telecommunications incumbents Telefonica and Telecom Italia (TI). Telefonica has grown since the early 1990s to become one of the largest telecommunications utilities worldwide, while TI is now a small firm controlled by the French media group Vivendi. This divergence occurred even though both the Italian and Spanish government implemented an activist industrial policy strategy aimed at favouring the internationalisation of, respectively, TI and Telefonica. The paper shows how these contrasting outcomes can be traced to the different regulatory power relationship between the state and domestic blockholders in the two countries. The findings shed light on the factors that lie behind the successful internationalisation of inward-looking firms active in regulated sectors. [ABSTRACT FROM AUTHOR]