Multinational Enterprises, Technological Intensity and Firm Survival. Evidence from Italian Manufacturing and Services Firms

Abstract

This paper investigates two main questions: Are affiliates of foreign multinationals more likely to exit the market than domestic firms? Does the exit probability of foreign firms depend on the technological environment in which they operate? Controlling for a set of firm- and industry-specific characteristics, our results show that Italian firms owned by foreign firms are more footloose than domestic ones regardless of the macro sector of activity in which they are involved (i.e. manufacturing and services). By taking into consideration the technological environment where firms operate, we also find that foreign ownership still exerts a negative influence on firm survival in both less and more technologically advanced industries. However, there is evidence of a stronger negative influence on the survival of firms operating in low- and medium-low technology industries and in less-knowledge-intensive services

Tacit Knowledge and Firm Performance Relationship. The Role of Product Innovation and the Firm Level Capabilities

“…Innovation in terms of new products is vital for business growth (Cucculelli & Ermini, 2012), especially in the context of an intense global competition and a rapid increase in the pace of technological development (Seidler-de Alwis & Hartmann, 2008). Pittiglio and Reganati (2015) argue that product and process innovation are important capabilities for firm's survival, especially in technology intensive sectors. Ability to innovate is a competitive advantage that emanates from idiosyncratic combinations of tacit knowledge, resulting in superior firm performance (Teece, 2007).…”

Can Industrial Co-Agglomeration between Producer Services and Manufacturing Reduce Carbon Intensity in China?

“…Furthermore, with the increasingly fierce competition between countries and enterprises, an industrial cluster linking production services to manufacturing has been formed, which has promoted the development of industrial integration. Scholars have analyzed the industrial co-agglomeration of different countries, such as Japan [19], the U.S.A [20], India [21], China [22] and Italy [23].…”

Foreign and multinational ownership impact on firm exit: A sectoral analysis

“…Larger firms operating in the manufacturing industry face a higher likelihood of exit. Van Beveren (2007) found support for the impact of foreignness and multinationality on survival in the manufacturing sector, whereas Ferragina et al (2012, 2014) and Pittiglio and Reganati (2015) only supported the liability effect of foreignness, but not that of multinationality.…”

“…From a theoretical point of view, the impact of MNCs on host countries' market structure and economy is a controversial topic because existing studies reached conflicting results. For example, studies support both a positive (Girma & Gong, 2008; Varum et al, 2014) and negative (Mata & Freitas, 2012; Pittiglio & Reganati, 2015) impact of foreignness on survival. Likewise, MNCs have also been found to be more (Blanchard et al, 2016) and less (Bandick, 2010) footloose (i.e., more likely to exit an economy) than domestic firms (DFs).…”