The Heterogeneity of Foreign Direct Investors: Linking Affiliates to Parent Productivity

Giorgia Giovannetti (), Enrico Marvasi and Giorgio Ricchiuti

Working Papers - Economics from Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa

Abstract: We investigate the heterogeneity within the group of foreign direct investors and the relation between affiliates characteristics and parent productivity. Using data on Italian firms, we show that foreign direct investors differ in their productivity level according to their characteristics and their investment decisions. Larger parents by employment or sales tend to be more productive, to have more affiliates and to invest in a higher number of destinations. Focusing on manufacturing firms, we show econometrically that having more and larger affiliates in rich countries leads to higher ex-post productivity. In particular, investing in high income countries or both in high and low income countries is associated with a subsequent productivity premium \textit{vis-\`a-vis} low income countries investors, especially for larger parents. Low income countries investors are found to be relatively more productive when operating in low technology sectors, while the opposite applies to high income countries investors.

Keywords: foreign direct investment; heterogeneous firms; total factor productivity; multinationals; foreign affiliates (search for similar items in EconPapers)
JEL-codes: F12 F14 F21 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2015
New Economics Papers: this item is included in nep-eur and nep-int
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.disei.unifi.it/upload/sub/pubblicazioni/repec/pdf/wp13_2015.pdf (application/pdf)

Related works:
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:frz:wpaper:wp2015_13.rdf

Access Statistics for this paper

More papers in Working Papers - Economics from Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa Via delle Pandette 9 50127 - Firenze - Italy. Contact information at EDIRC.
Bibliographic data for series maintained by Giorgio Ricchiuti ().