Productivity spillovers and regional differences: some evidence on the italian manufacturing sector

This work examines the main theoretical and empirical interpretations regarding the effects of foreign direct investment on productivity of local firms and, in particular, in which way productivity spillovers are related to the existence of regional differences. By taking into consideration the Italian manufacturing sector and using cross-section data, we find that although at a national level productivity levels are higher in the domestic sectors where multinational firms account for larger shares, productivity spillovers are concentrated only in the north-western area of Italy.foreign direct investment; productivity spillovers

Do domestic firms benefit from the presence of MNEs? The case of the Italian manufacturing sector

According to the main economic literature, foreign direct investment (FDI) from Multinational Enterprises (MNEs) can generate positive externalities to host countries, increasing the domestic firms productivity. Recently, the attention of researchers has moved from the analysis of ''horizontal'' spillovers i.e. those benefits to local enterprises at an intraindustrial level - towards the investigation of ''vertical'' spillovers phenomenon i.e. the diffusion of positive effects on domestic economies at an inter-industry level. In this paper we investigate the presence of both these two kinds of spillovers using a firm-level panel data of domestic and foreign firms in the Italian manufacturing sector. The results show the lack of ''horizontal'' spillovers and, at the same time, the presence of ''vertical'' ones.FDI; MNEs; Spillovers; Italian manufacturing sector

VERTICAL INTRA-INDUSTRY TRADE: PATTERNS AND DETERMINANTS IN THE ITALIAN CASE

Using a cross-country analysis, this paper examines the determinants of the Italian intra-industry trade in vertically differentiated products. By considering the degree of specialization by quality within industries, we found that Italys IIT in low-quality products is higher the lower the factor endowment difference and the higher the technological gap with the partner country. These findings confirm the peculiarity of the Italian specialization model which is strongly different from that of other main industrialized countries which are located mainly at the higher end of the price-quality spectrum

TWO-WAY INTERNATIONAL TRADE AND PRODUCTION IN ITALY: A COUNTRY/INDUSTRY SPECIFIC ANALYSIS

Economic interactions among high-income developed countries are characterized by high degrees of both intra-industry trade and intra-industry affiliate production and sales. Similar high-income countries both heavily trade with and invest into each other. This paper examines the determinants of Italian intra-industry trade and intra-industry production with most European trading partners using a dataset where variables are different not only between countries but also between sectors of the same country. Using different econometric methods, the results obtained suggest that intra-industry trade and intra-industry production tend to share the same determinants; in particular they are higher as the two partner countries are more similar in relative factor endowments (physical and technological capital), in relative country size and are less geographically distant.intra-industry trade, intra-industry foreign direct investment.

Vertical spillovers from multinational enterprises: Does technological gap matter?

Foreign direct investment (FDI) from Multinational enterprises (MNEs) can augment the productivity of domestic firms insofar as knowledge “spills over” from foreign investors to local producers. The capacity of local companies to exploit knowledge from MNEs can be affected by the technology gap between foreign and local enterprises at both horizontal (in the same industry) and vertical (in different industries) level. Whereas most of the empirical literature has focused exclusively on the analysis of horizontal and backward spillovers (i.e. between MNEs and local suppliers), the present paper also examines the relationship between FDI-related spillovers and technological gap in the Italian manufacturing sector at forward level (i.e. between MNEs and local buyers). Results suggest that at both intra-industry and forward level, the technological gap is of considerable importance for the spillover effect, particularly in the case of low-medium gap

The impact of FDI on firm survival in Italy

The aim of the analysis is to investigate the impact of inward FDI on Italian manufacturing and services firm survival. The paper is organized in two steps. First, we carry out theoretically and empirically the analysis of firm survival distinguishing between foreign multinationals, domestic multinationals and domestic non multinational firms. The empirical analysis is based on survival functions as well as a Cox proportional hazard model, controlling for firm and industry specific covariates. Second, we examine the effect of foreign presence on the survival of host country firms distinguishing between the impact on Italian-owned (indigenous) multinational and non multinational firms and on other foreign-owned firms (i.e., other MNEs) located in the host country. The finding reveals that during the period 2005-2007 while manufacturing and service firms owned by foreign MNEs are more likely to exit the market than national firms, on the other hand domestic MNEs have a higher chance of survival. These results stand even when other firm and industry specific variables are controlled for. This result support the idea that foreign MNEs are inherently footloose while Italian MNEs are more firmly rooted in the local economy. The estimates also indicate that older, larger and more productive firms have higher survival rates. Finally, firm survival of foreign MNEs and domestic MNEs is unaffected by the increased presence of foreign MNEs. On the other hand, the increased foreign presence has a positive impact on Italian non-MNEs’ survival only in the service sector.Domestic firms, Multinational Enterprises, Survival Analysis

HORIZONTAL AND VERTICAL SPILLOVERS FROM FDI IN THE ITALIAN PRODUCTIVE SYSTEM

Foreign direct investment (FDI) from Multinational Enterprises (MNEs) can generate positive externalities to host countries, increasing domestic firms' productivity. Recently, the attention of researchers has moved from the analysis of ''horizontal'' spillovers – i.e. those benefits to local enterprises at an intra-industrial level - towards the investigation of ''vertical'' spillovers phenomenon – i.e. the diffusion of positive effects on domestic economies at an inter-industry level, as in the case of technology transfers to domestic suppliers or customers in the production chain. Using a firm-level panel data, this paper analyses spillovers from FDI in the Italian productive system both within and across industries. Our results suggest no evidence of ''horizontal'' spillover and the existence of ''vertical'' spillover whose impact on local firms seems to be very limited.FDI; MNEs; Productivity Spillovers, Backward Linkages, Forward Linkages, Italian productive system.

Law Enforcement and Illegal Trafficking of Waste: Evidence from Italy

The illegal trafficking of waste has become one of the fastest growing areas of crime and one of the most lucrative industries among organized criminal activities, which has infiltrated both the Italian urban and hazardous waste management cycle. In this study, we aim to investigate the determinants of the organized activities for the illegal trafficking of waste (art. 260 of the Environmental Code) using waste, economic, and enforcement data in a panel analysis over the period 2002-2013. Our main findings reveal that in most of the Italian regions enforcement activities do not exert significant deterrence on criminal behaviors; a negative relationship between enforcement and illegal trafficking of waste can be identified only for very high levels of enforcement efforts. Moreover, we find that the major determinants of the illegal trafficking of waste rate differ between northern-central and southern regions, confirming the existence of a regional dualism. In particular, while in the North-Centre area the crime rate is positively related to level of education and negatively to the adoption of environmentally sound policies, in southern regions the organized activities for the illegal trafficking are negatively related to the education attainment and positively to the endowment of waste management plants

HETEROGENEITY IN FIRM PERFORMANCE DURING ECONOMIC CRISIS

What happens to firms during periods of deep economic crisis? Did different types of firms perform differently under the economic crisis? With the aid of a rich database and focusing on the literature regarding the growth of firms, this paper investigates the relative profitability performance of Italian firms during the current economic crisis, exploring those factors, which help certain firms to do relatively better even in the slowdown period. Some preliminary results show that the Italian firms that are relatively young in age, with relatively better current liquidity and more focused on domestic market have performed better than other firms. Furthermore, firms operating in high-tech and in highly concentrated sectors have enjoyed a better performance in this period

Does multinational ownership affect firm survival in Italy?

The aim of this paper is to investigate whether and how multinational status and foreign ownership affect the survival of Italian manufacturing and service firms. To this end, we analyze firm survival by distinguishing Italian firms as foreign multinationals (FMNEs) domestic multinationals (DMNEs) or domestic non-multinational firms (NMNEs). The empirical analysis is based on the Kaplan-Meier survival estimator and on the Cox proportional hazard model, in which we look for the impact of ownership dummies on firm survival, controlling for several firm and industry specific covariates. Our findings reveal that manufacturing and service firms owned by foreign multinationals are more likely to exit the market than either DMNEs or NMNEs. Moreover, DMNEs show a higher chance of survival in services. By decomposing firm activities into different technological classes, we also find that foreign ownership still exerts a negative influence on firm survival in both static and dynamic industries, while domestic multinationals in less-knowledge-intensive services appear more persistent