Does ownership matter? A comparison of foreign-owned and domestic firms in transition countries

Using firm level data for Transition Countries this paper tests whether foreign-owned firms are more productive than domestic firms. In particular I try to identify the relevant factors that affect productivity and which have a significant relationship with foreign ownership

Does international trade favor proximity in cultural beliefs?

Cultural proximity has been considered as a crucial determinant of bilateral trade flows. Scant emphasis has, instead, been devoted to the investigation of the opposite direction of causality. International trade eases contacts and increases trust among contracting parties and may, then, promote the spread of cultural beliefs across borders. By using World and European Values Surveys data, we provide evidence on the role of trade flows in favoring countries' cultural convergence for a large sample of countries over the period 1989-2014. Results confirm that international trade narrows differences in cultural beliefs and attitudes, but just when trade partners share some culture-related traits. Common ancestry, religion and legal system as well as high historical bilateral migration flows are necessary conditions for trade reducing cultural distance. Also, the convergence effect turns to be completely driven by trade flows of differentiated goods which entail relationship-specific investments and a deeper commitment between contracting parties

Productivity dispersion and its determinants: the role of import penetration

The new heterogeneous firm models in international economics suggest a negative impact of trade openness on the within-sector disparities, due to a restructuring process leading to a resources reallocation toward high efficient firms and the exit of less productive ones. I test this hypothesis for the Italian manufacturing sectors making use of both static and dynamic panel data models. Especially, I investigate the existence of heterogeneous effects in terms of origin of imports and I take into account of the regional heterogeneity computing the productivity dispersion indicator within each sector and regional macro-area. The analysis is implemented within a comprehensive framework controlling for other potential determinants, such as the technological factors and the domestic competition. My findings show that the competitive pressure from low income countries reduces the productivity heterogeneity across firms, while an opposing impact is detected for the exposure to trade with high income economies, and I argue that two different mechanisms are at work behind these effects

Learning by exporting in Turkey: An investigation for existence and channels

Using a rich longitudinal database at the plant level, I shed new light on the causal nexus between exports and productivity for Turkey, a middle-income country. I find evidence for both self-selection into exporting and learning-by-exporting. My main focus is on post-entry effects. To test this hypothesis I follow recent empirical literature and I apply the Propensity Score Matching and a Difference-in-Difference estimator. I find a higher labour productivity and TFP growth for exporting firms in the entry year and some years following the entry. Exports seem to place firms on a superior productivity path. My main contribution is to show the strict linkage between export and import activity: export starters often start also importing. Learning by exporting effects hold when I control for the role of imports and I verify larger productivity gains for firms which start exporting and importing at the same time. Finally, in order to verify if post-entry effects are not only scale effects but work through competition channel and/or technology transfers, I look for a heterogeneity according to the sectoral productivity gap between the domestic market and foreign trade partners. I verify a different timing of efficiency improvements between comparative advantage and disadvantage sectors. Copyright © 2012 De Gruyter. All rights reserved

Productivity Dispersion and its Determinants: The Role of Import Penetration

The new heterogeneous firm models in international economics predict a negative impact of trade openness on within-sector productivity disparities, due to a restructuring process leading to a reallocation of resources towards more efficient firms and the exit of less productive ones. I test this hypothesis for the Italian manufacturing sectors making use of panel data models. I investigate the existence of heterogeneous effects in terms of origin of imports and I account for a geographical dimension computing the productivity dispersion indicator by sector and regional macro-area. The analysis is implemented within a comprehensive framework controlling for other potential determinants, such as technological factors and domestic competition. My findings show that competitive pressure from low income countries reduces the productivity heterogeneity across firms. On the contrary, a positive impact is detected for the increased availability of intermediates originating from developed countries. © 2012 Springer Science+Business Media New York

Productivity dispersion and its determinants: the role of import penetration

The new heterogeneous firm models in international economics suggest a negative impact of trade openness on the within-sector disparities, due to a restructuring process leading to a resources reallocation toward high efficient firms and the exit of less productive ones. I test this hypothesis for the Italian manufacturing sectors making use of both static and dynamic panel data models. Especially, I investigate the existence of heterogeneous effects in terms of origin of imports and I take into account of the regional heterogeneity computing the productivity dispersion indicator within each sector and regional macro-area. The analysis is implemented within a comprehensive framework controlling for other potential determinants, such as the technological factors and the domestic competition. My findings show that the competitive pressure from low income countries reduces the productivity heterogeneity across firms, while an opposing impact is detected for the exposure to trade with high income economies, and I argue that two different mechanisms are at work behind these effects

Learning by exporting in Turkey: an investigation for existence and channels

Using a rich longitudinal database at the plant level, I shed new light on the causal nexus between exports and productivity for Turkey, a middle-income country. I find evidence for both self-selection into exporting and learning-by-exporting. My main focus is on post-entry effects. To test this hypothesis I follow recent empirical literature and I apply the Propensity Score Matching and a Difference-in-Difference estimator. I find a higher labour productivity and TFP growth for exporting firms in the entry year and some years following the entry. Exports seem to place firms on a superior productivity path. My main contribution is to show the strict linkage between export and import activity: export starters often start also importing. Learning by exporting effects hold when I control for the role of imports and I verify larger productivity gains for firms which start exporting and importing at the same time. Finally, in order to verify if post-entry effects are not only scale eects but work through competition channel and/or technology transfers, I look for a heterogeneity according to the sectoral productivity gap between the domestic market and foreign trade partners. I verify a different timing of efficiency improvements between comparative advantage and disadvantage sectors

The global operations of European firms - The second EFIGE policy report

This Bruegel blueprint analyses, within the framework of the EFIGE (European Firms in a Global Economy) project, the export and foreign investment performance of European firms. It is based on new cross-country data from 15,000 individual firms never available before. Written by Giorgio Barba Navaretti, Matteo Bugamelli, Gianmarco Ottaviano and Fabiano Schivardi, the report looks at the specific elements that make some European companies more competitive than others in foreign markets, revealing that firm characteristics -mainly size- are the primary determinants of export performance, even more so than country characteristics. Therefore the authors suggest that firm growth and consolidation in all European countries would generate a considerable increase in the value of European exports and thus help lift European growth. These findings will be crucial for policymakers, who, in order to boost the chance of European firmsâ?? on foreign markets, should shift the policy discussion from the current focus on specific sectors and skill groups to structural reforms that allow firms across the board to grow and to develop more sophisticated forms of management. Until now, evidence on European firmsâ?? competitiveness has been based on partial, non-comparable national data. But for the first time this paper is based on detailed results from a new large-scale survey of 15,000 manufacturing companies in seven EU countries (Austria, France, Germany, Hungary, Italy, Spain and the United Kingdom). The survey examines firmsâ?? exporting, importing, outsourcing and foreign investment activities. This survey data has then been combined with structural data about the individual firms taken from their balance-sheets such as governance, profits, number of employees.