FDI and heterogeneous performance of European enterprises

Valeria Gattai and Giorgia Sali

Economia e Politica Industriale: Journal of Industrial and Business Economics, 2016, vol. 43, issue 1, 25-65

Abstract: This paper investigates the link between Foreign Direct Investment (FDI) and performance of European enterprises. Drawing on a large longitudinal database, we introduce a sophisticated taxonomy of FDI that accounts for both the FDI direction—inward versus outward—and the number of FDI. Our estimates suggest that there are systematic performance differences among firms with heterogeneous FDI involvement. Interestingly, firms experiencing some FDI enjoy a superior performance compared with purely domestic enterprises. Moreover, within the FDI class, the deeper the firm’s involvement in FDI, the larger the performance difference with purely domestic enterprises. These results are consistent through several econometric models, performance measures and definitions of FDI; moreover, they are robust to many alternative specifications including firm, industry and country controls. Copyright Associazione Amici di Economia e Politica Industriale 2016

Keywords: FDI; Internationalization; Performance; Heterogeneous firms; Europe; F23; L25; O52 (search for similar items in EconPapers)
Date: 2016
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Journal Article: FDI and heterogeneous performance of European enterprises (2016)
Working Paper: FDI and Heterogeneous Performance of European Enterprises (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:spr:epolin:v:43:y:2016:i:1:p:25-65

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DOI: 10.1007/s40812-015-0022-5

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