Markets, Hierarchies and Subsidies in the Italian Alto Adriatico Fishery Market

We adopt a simple model examining the relationship between labour hierarchical control and firm size, in an industry where firms compete à la Cournot. We derive testable implications and use data from the Italian Alto Adriatico fishery market, a highly subsidized sector, where most firms incur in losses. We adopt a probit model estimated by the maximum likelihood routine. Main findings are that the probability to earn profits positively depends on the firm market share, on the adoption of techniques that minimize the labour hierarchical control and on the adoption of environmental-friendly fishing techniques, and negatively depends on the number of boats in the market and the use of resource disruptive catching techniques. Policy implications suggest letting the proper governance to adapt to the transactions at stake.