R&D AND TECHNOLOGICAL INTERNATIONALISATION: EVIDENCE FROM A RANDOM COEFFICIENT TREATMENT MODEL

Giovanni Cerulli and Mario De Marchi

Review of Applied Economics, 2012, vol. 09, issue 01-2

Abstract: By considering a sample of Italian manufacturing firms, this paper aims at comparing the R&D performance of foreign (multinational) enterprises with that of home companies. Its methodological innovation consists in adopting a random coefficient treatment model, which allows us to: (i) embed this comparison in a “counterfactual” setting; (ii) and calculate the firms’ “specific treatment effect”. The carrying out of these analyses would not be possible with the use of standard regression tools. The results suggest that the weakness of the (Italian) national R&D production system mainly lies in the “smallness” of its firms: while a home company of large size is able to perform more R&D than a foreign twin, the performance of a home company of small size is worse than that of similar foreign firms. Thus, as for policy implications, we suggest that attracting inward investments should be accompanied by policies aimed at better supporting the growth of home companies.

Keywords: International Development; International Relations/Trade (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:ags:reapec:264580

DOI: 10.22004/ag.econ.264580

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