Outward FDI from Italy and its policy context

Abstract

Italian companies started to invest abroad in the 1960s in search of new markets. However, Italy’s outward foreign direct investment (OFDI) performance is quite modest compared with that of other European Union (EU) countries, mainly due to structural characteristics like the low number of large firms, the specialization in traditional low- and medium-technology manufacturing industries and the almost negligible activity in advanced services. The global economic and financial crisis seriously affected the Italian economy. However, the positive trend of Italian OFDI was not interrupted, and in 2009 OFDI flows remained stable compared to 2008. Habitually silent on this policy area in earlier decades, the Italian Government has recently shown a more favorable stance toward OFDI, introducing specific policy measures addressed to small and medium-sized enterprises, which have started to expand strongly abroad – these now constitute almost 90% of Italian multinational enterprises (MNEs)