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Do FDI in Business Services Affect Firms’ TFP? Evidence from Italian Provinces

In: Geographical Labor Market Imbalances

Author

Listed:
  • Massimo Armenise

    (ISTAT)

  • Giorgia Giovannetti

    (University of Florence)

  • Gianluca Santoni

    (Sant’Anna School of Advanced Studies)

Abstract

This chapter studies the effect of FDI in business services on total factor productivity (TFP) of Italian manufacturing firms, over the period 2003–2008. More precisely, the chapter tests the presence of vertical linkages between foreign business professionals and domestic manufacturing firms. Our results, robust to different specifications, show that foreign capital inflows in business services improve the performance of domestic manufacturing firms. This relationship is particularly strong in the case of high-tech sectors, such as mechanics and machinery. Traditional sectors, on the other hand, seem to be less sensitive to the availability of foreign business services in the same location.

Suggested Citation

  • Massimo Armenise & Giorgia Giovannetti & Gianluca Santoni, 2015. "Do FDI in Business Services Affect Firms’ TFP? Evidence from Italian Provinces," AIEL Series in Labour Economics, in: Chiara Mussida & Francesco Pastore (ed.), Geographical Labor Market Imbalances, edition 127, chapter 0, pages 195-217, Springer.
  • Handle: RePEc:spr:aiechp:978-3-642-55203-8_9
    DOI: 10.1007/978-3-642-55203-8_9
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    Keywords

    Business services; FDI; Manufacturing; Panel data; Productivity;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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