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Productivity and the international firm: dissecting heterogeneity

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  • Davide Castellani
  • Giorgia Giovannetti

Abstract

Higher productivity of multinational firms and exporters has been widely documented in the literature, but the sources of this heterogeneity are still a black box. Using an original dataset on Italian firms, we show that higher total factor productivity of international firms can be to some extent explained by higher R&D intensity and managerial capabilities. However, our results suggest that heterogeneity is more in the slope than in the constant of the production function. In particular, allowing international firms to have different return to labour and capital inputs, we are able to account for their entire productivity premium. This has implications for both labour and capital market reforms.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Journal of Economic Policy Reform.

Volume (Year): 13 (2010)
Issue (Month): 1 ()
Pages: 25-42

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Handle: RePEc:taf:jpolrf:v:13:y:2010:i:1:p:25-42

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Keywords: total factor productivity; firm heterogeneity; exporters; multinational firms;

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References

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Citations

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Cited by:
  1. Giorgia Giovannetti & Giorgio Ricchiuti & Margherita Velucchi, 2013. "Heterogeneity in managerial strategies and internationalization of firms: the case of Italy," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2013(2), pages 51-66.
  2. A. Lasagni & A. Nifo & G. Vecchione, 2012. "Firm productivity and institutional quality. Evidence from Italian industry," Economics Department Working Papers 2012-EP07, Department of Economics, Parma University (Italy).
  3. Naudé, Wim & Gries, Thomas & Bilkic, Natasa, 2013. "Firm-Level Heterogeneity and the Decision to Export: A Real Option Approach," IZA Discussion Papers 7346, Institute for the Study of Labor (IZA).
  4. Antonietti,Roberto & Marzucchi,Alberto, 2013. "Green investment strategies and export performance: A firm-level investigation," INGENIO (CSIC-UPV) Working Paper Series 201302, INGENIO (CSIC-UPV).
  5. Fulvio Castellacci, 2014. "Service Firms Heterogeneity, International Collaborations and Export Participation," Journal of Industry, Competition and Trade, Springer, vol. 14(2), pages 259-285, June.
  6. Marcello Pagnini & Valter Di Giacinto & Giacinto Micucci & Matteo Gomellini, 2011. "Mapping Local Productivity Advantages In Italy: Industrial Districts, Cities Or Both?," ERSA conference papers ersa11p1806, European Regional Science Association.
  7. Békés, Gábor & Halpern, László & Muraközy, Balázs, 2011. "A teremtő rombolás szerepe a vállalati termelékenység alakulásában Magyarországon
    [The role of creative destruction in the development of corporate productivity in Hungary]
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 111-132.
  8. Valeria Gattai & Valentina Trovato, 2014. "Estimating sourcing premia with Italian regional data," Working Papers 276, University of Milano-Bicocca, Department of Economics, revised Jun 2014.
  9. Péter Harasztosi, 2011. "Growth in Hungary 1994-2008: The role of capital, labour, productivity and reallocation," MNB Working Papers 2011/12, Magyar Nemzeti Bank (the central bank of Hungary).
  10. Annamaria Nifo & Domenico Scalera, 2011. "Structural Changes in Italian Industry: The Impact of Crisis. A Comment on the Book Edited by Laura Rondi and Francesco Silva," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 2, June.
  11. De Masi, G. & Giovannetti, G. & Ricchiuti, G., 2013. "Network analysis to detect common strategies in Italian foreign direct investment," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(5), pages 1202-1214.
  12. Curzi, Daniele & Olper, Alessandro, 2012. "Export behavior of Italian food firms: Does product quality matter?," Food Policy, Elsevier, vol. 37(5), pages 493-503.
  13. Castellacci, Fulvio, 2010. "Firm heterogeneity, international cooperations and export participation," MPRA Paper 27585, University Library of Munich, Germany.
  14. Giulio Cainelli & Eleonora Di Maria & Roberto Ganau, 2011. "Agglomeration, related-variety and internationalisation. Does a relationship exist?," Openloc Working Papers 1114, Public policies and local development.

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