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

Borin, Alessandro; Mancini, Michele

doi:10.1007/s10290-016-0255-z

Cited by 126 publications

(38 citation statements)

References 65 publications

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“…From ORBIS, we construct a sample of worldwide manufacturing affiliate firms that are majority owned by a European parent company whose main sector is a manufacturing industry. Papers that have used similar information to examine FDI activity include, among others, Geishecker et al (2009), Chen and Moore (2010), Engel, Procher, and Schmidt (2013), Mart ı et al (2015), Damijan et al (2016) and Borin and Mancini (2016). To determine whether an investment can be considered FDI, the OECD (2005) recommends classifying an enterprise within a country on the basis of the presence or absence of effective foreign participation in its capital.…”

Section: Data and Measurementmentioning

confidence: 99%

“…(), Damijan et al. () and Borin and Mancini (). To determine whether an investment can be considered FDI, the OECD () recommends classifying an enterprise within a country on the basis of the presence or absence of effective foreign participation in its capital.…”

Section: Data and Measurementmentioning

confidence: 99%

“…The analysis of exporting and FDI decisions by heterogeneous firms starting with the Helpman et al (2004) model is the origin of much empirical literature that examines the sorting between domestic, exporting and MNCs. Papers documenting this hypothesis include, among others, Girma, G€ org, and Strobl (2004), Girma, Kneller, and Pisu (2005), Tomiura (2007), Geishecker, G€ org, and Taglioni (2009), Arnold and Hussinger (2010), Castellani and Giovanetti (2010), Gullstrand, Olofsdotter, and Thede (2016), Borin and Mancini (2016), Engel and Procher (2012), Engel, Procher and Schmidt (2013) and Mart ı, Alguacil, and Orts (2015), along with the literature reviews by Greenaway and Kneller (2007) and Yeaple (2013).…”

Section: Introductionmentioning

confidence: 99%

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Multinational activity of European firms and heterogeneity

2018

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consider simplified versions of the dependent variable as the number of locations in which the MNEs are present as well as the number of their subsidiaries.A large part of the empirical literature concerning the link between productivity and the scope and the scale of MNEs uses data of firms from a single country. Our paper uses a multi-country data set. We deliberately enlarge the number of countries to introduce more variability in the data, taking into consideration the control of the heterogeneity coming from the existence of parent multinationals from different countries. A second contribution of our paper is that we use count data models to estimate the scope elasticity. This is a statistical technique almost not used in this research area. Given that the dependent variable is the number of subsidiaries that the parent firm has in a foreign market, we think this technique is more appropriate for estimating the scope elasticity. Furthermore, we take into consideration the existence of a large number of zeros (no subsidiaries in a given foreign market). An appropriate approach to deal with this issue is to estimate zero-inflated versions of count models (Cameron & Trivedi, 2005). This alternative approach proves that there is a systematic bias when scope elasticities are estimated not taking this into account. Overall, our contribution in estimating scope and scale elasticities associated with the multinational activity of firms is, on the one hand, the use of a multi-country data set, which is relatively infrequent in the available empirical literature and, on the other hand, the use of new estimation procedures for scope elasticity, in particular.The third prediction coming out from the model of firm heterogeneity and multinational production refers, as we mentioned before, to the relationship between the attributes of the destination countries (distance, size of the country, etc.) that make FDI more or less attractive and the characteristics of the productivity distributions of firms entering foreign markets. There is an asymmetry between both elements: those country attributes that positively affect the entry of MNEs are negatively related to the average productivity of parent firms entering abroad, and the opposite for those country attributes that have a negative impact on FDI activity. We call this result the "asymmetric effect hypothesis." Although this is a central prediction of the model of firm heterogeneity and multinational activity, empirical evidence on this hypothesis is rather limited. To our knowledge, it has been considered by Yeaple (2009), Chen and Moore (2010) and Hyun and Hur (2013). The first paper examines a sample of US multinationals, the second contains an application for French multinationals and the third refers to South Korean firms.Concerning the asymmetric effect prediction, our contribution here is to provide additional evidence using a multi-country data set which is richer in terms of the variability of the country characteristics and also in the dispersion of the productiv...

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Section: Data and Measurementmentioning

confidence: 99%

Section: Data and Measurementmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Multinational activity of European firms and heterogeneity

2018

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“…Firms are initially divided into a non-CAT and an CAT group, taking due account of multinationals (MNE), which are over-represented among CAT firms and have been shown to be among the most efficient companies (see Borin and Mancini, 2015, for a quantification of the productivity premium of Italian multinationals). Firms are then allocated to the following subgroups depending on their status: (1) non-MNE non-CAT firms, (2) non-MNE CAT firms, (3) MNE non-CAT, and (4) MNE and CAT.…”

Section: Cat Firms Do It Bettermentioning

confidence: 99%

'The Phenomenal Cat': Firms Clawing the Goods of Others

Nino

2015

SSRN Journal

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“…They found that the link between companies investments in R&D and labour productivity in micro sized companies does not differ largely from larger ones. In another study, Borin and Mancini (2016) measured the effects of foreign direct investment on the performance of Italian companies. They found an effect on the growth rate of labour productivity only in short time horizons and pointed out the importance of the given type of economic sector.…”

Section: Introductionmentioning

confidence: 99%

Impact of Technology Investment on Firm’s Production Efficiency Factor in Manufacturing

Novotná

Volek

Rost

et al. 2020

Journal of Business Economics and Management

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The goal of this paper is to investigate the impact of technology investments on production efficiency in manufacturing companies and how different these relationships are for low-technology and high-technology companies. The empirical part was based on the analysis of 2,848 large, small and medium-sized Czech companies by using Bayesian networks (BNs). The results show that technological investments have the greatest positive impact on the growth of labour productivity and on a decline in labour intensity in low technology enterprises. The technological investments have a positive impact on labour productivity growth in high-technology enterprises, but at the same time, the technological investments have an impact on the increase of labour intensity. On the contrary, the influence of investment growth was insignificant on the indicators of material and services intensity. Technologically intensive investments have a different impact on small, mediumsized and on large enterprises. The reaction of large companies depends on the category of technology intensity in contrast to small and medium-size enterprises.

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

Cited by 126 publications

References 65 publications

Multinational activity of European firms and heterogeneity

Multinational activity of European firms and heterogeneity

'The Phenomenal Cat': Firms Clawing the Goods of Others

Impact of Technology Investment on Firm’s Production Efficiency Factor in Manufacturing

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