Using a large sample of Italian manufacturing firms, in this paper we estimate a structural model of research, innovation, productivity and export performance augmented to take account for the role played by spatial agglomeration externalities. This model, which is an ‘augmented’ version of Crepon, Duguet and Mairesse (1998) model, comprises four main equations. The first identifies the factors underlying the intensity of Research and Development (R&D) investments; the second links R&D capital to innovation output; the third focuses on Total Factor Productivity (TFP) as determined by innovation; the fourth relates TFP to export performance. Our estimates show the significant role played by local externalities in these processes. In particular, related variety and urbanization positively affect the creation of new ideas through R&D, while specialization impacts on TFP to complement innovation output. Finally, urbanization economies support TFP in driving firms’ export performanc

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In this paper, we assess whether attracting higher amounts of FDI induces a greater level of economic complexity in a country. Using a panel of 117 countries and 22 years, from 1995 to 2016, we test for the causal relationship between inward FDI and economic complexity using a panel Granger causality approach. We also estimate the short-run relationship between these two factors using a panel vector autoregressive model and an impulse response function approach. We find that accumulating a higher stock of inward FDI per capita Granger-causes a greater economic complexity in a country, and not vice versa. This causal effect is very small, however, and occurs only in countries with above average levels of GDP per capita, tertiary education, tertiarization or financial development. Looking at the FDI entry mode, we find that only greenfield FDIs Granger-cause economic complexity in developed countries, whereas mergers and acquisitions have no such effect. Finally, we find that knowledge-intensive greenfield projects are the only form of inward FDI that Granger-cause complexity in a less developed country, but the estimated effect is near zero and disappears after two years.

Abstract. This paper emphasizes the role of labour demand as a determinant of human capital formation. After a section in which the alternative conceptions on the functioning of labour markets are presented and different ways of measuring human capital are compared, an applied analysis is carried out in which we provide a labour-demand-oriented measure of human capital, as defined by the amount of specific skills firms generate through work-based training (WBT) activities. By merging three rich firm-level datasets, we estimate the impact of a set of variables supposed to affect both the propensity to invest in WBT and the intensity of training within the Italian manufacturing industry over the period [2001][2002][2003][2004][2005]. Special attention is devoted to the variables characterizing withinfirm organization of knowledge, organizational change and the formation of competence pipelines: among them, innovation, internationalization commitment, out-sourcing and new hirings. The estimates show that the effect of innovation on WBT is higher when the introduction of new technologies is supported by organizational innovations. When looking at the nature of WBT, we investigate the different determinants of the firms' propensity to provide both in-house and outside training. We measure training intensity in terms, respectively, of the number of provided training activities, private and total training costs and share of trainees.