Business Forms, Capital Democratization and Innovation in a Merchant Economy Milan in the 1850s

The paper is based on extensive research done in Milan's Chamber of Commerce. The resulting database of 176 founding acts of businesses registered in the 1850s allows an unique insight in the functioning mechanisms of Lombardy's economy: how liquidity was collected and distributed, how partnerships were formed, inside which social circles were partners found, how much kinship ties determined business decisions, what criteria proved relevant in the investment decision making processes, how were innovation and entrepreneurship rewarded. Based on the richness of the data collected several conclusions were drawn on business forms, partners characteristics and innovation. The picture emerging from the sample vindicates the capacity of Milan's merchant elite to foster innovation through the efficient allocation of capital and the creation of entrepreneurial capital, averting at the same time disastrous financial crises: the solid base of the successive development of the region.