The paper analyzes capital increases by Italian corporates between 2008 and 2020. It studies the characteristics of firms that more frequently resort to such operations and the effects of capital strengthening on their financial conditions and economic performance.
About 1 percent of corporates resorted to capital increases in the analyzed period. Firm size and riskiness affect both the likelihood of retrieving new capital and the destination of the new funds. Fragile firms use new equity mostly to rebalance their financial structure, thus lowering their market exit and insolvency rates. On the other hand, financially sound firms direct the funds to new investments, which foster revenues growth.