EconPapers    
Economics at your fingertips  
 

Foreign direct investment and firm performance: an empirical analysis of Italian firms

Alessandro Borin and Michele Mancini
Additional contact information
Alessandro Borin: Bank of Italy

Review of World Economics (Weltwirtschaftliches Archiv), 2016, vol. 152, issue 4, No 5, 705-732

Abstract: Abstract Both empirical and theoretical literature show that multinational firms exhibit a competitive advantage before investing abroad. However, there are no clear empirical results regarding the ex post effects of foreign direct investment (FDI) on firm performance, partially due to the inadequacy of available firm-level data. We build a brand new firm-level dataset able both to represent the extent of Italian firms’ foreign activity and to provide reliable measures of key performance indicators, especially total factor productivity (TFP) and employment. We then use a propensity score matching procedure to analyze the causal relationship between FDI and firm performance. Firms investing abroad for the very first time, especially in advanced economies, show higher productivity and employment dynamics in the years following the investment: the average positive effect on TFP is driven by new multinationals operating in specialized and high-tech sectors, while the positive employment gains are explained by an increase of the white collar component. On average there are no negative effects on the parent firm’s blue collar component.

Keywords: Foreign direct investment; Multinational firms; Productivity (search for similar items in EconPapers)
JEL-codes: C25 D24 F23 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (35)

Downloads: (external link)
http://link.springer.com/10.1007/s10290-016-0255-z Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: Foreign direct investment and firm performance: an empirical analysis of Italian firms (2015) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:weltar:v:152:y:2016:i:4:d:10.1007_s10290-016-0255-z

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10290/PS2

DOI: 10.1007/s10290-016-0255-z

Access Statistics for this article

Review of World Economics (Weltwirtschaftliches Archiv) is currently edited by Paul Bergin, Holger Görg, Cédric Tille and Gerald Willmann

More articles in Review of World Economics (Weltwirtschaftliches Archiv) from Springer, Institut für Weltwirtschaft (Kiel Institute for the World Economy) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2025-03-22
Handle: RePEc:spr:weltar:v:152:y:2016:i:4:d:10.1007_s10290-016-0255-z