Foreign Ownership and Economic Performance in Italy: Not all is Cherry-Picking!
Rosario Crino () and
Fabrizio Onida ()
No 207, KITeS Working Papers from KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy
This paper studies the effects of foreign participation on economic performance in Lombardy, a Northern Italian region accounting for more than 40% of Foreign Direct Investment inflows in Italy. We employ a large database consisting of balance sheet and foreign ownership information for more than 13,000 firms and analyze different dimensions of economic performance: capital and knowledge-intensity, productivity, wages, returns to investments and financial structure. We find that foreign multinationals are more knowledge-intensive, more productive, pay higher wages and show a more solid financial structure than national firms; at the same time, foreign multinationals show lower returns to investments. Propensity score estimation results show that this difference implies a true effect from foreign participation in the manufacturing sector; in the services sector, instead, the difference in favour of multinationals is mostly accounted for by a differential pattern of industry location between the two types of firms, by the larger size of multinationals and by the likely tendency of the latter to invest in already high-performing national firms.
Keywords: Multinational Firms; Performance Indicators; Propensity Score Estimation (search for similar items in EconPapers)
JEL-codes: F1 F2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-eff and nep-knm
Date: 2007-11, Revised 2007-11
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Persistent link: https://EconPapers.repec.org/RePEc:cri:cespri:wp207
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