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Investments Abroad and Performance at Home Evidence from Italian Multinationals Author info | Abstract | Publisher info | Download info | Related research | Statistics Giorgio Barba Navaretti (University of Milan and Centro Studi Luca d’Agliano)
Davide Castellani (University of Urbino)
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Foreign activities of MNEs have important effects on home economies. The debate is ambiguous: concerns that foreign investments deplete domestic economies are often coupled with the pride for doing good business in foreign countries. This paper addresses this question by defining the appropriate counterfactual: what would have happened to investing firms if they had not invested abroad. It applies propensity score matching to derive these hypothetical performance trajectories from a sample of national firms which never invested abroad. For a sample of Italian firms, it finds that investments improves growth of total factor productivity and output. It also finds no significant effects on employment. These results support the view that foreign investments strengthen rather than depleting home activities.
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Paper provided by Centro Studi Luca d\'Agliano, University of Milano in its series Development Working Papers with number
180.
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Date of creation: 01 Dec 2003Date of revision:
Handle: RePEc:csl:devewp:180Contact details of provider: Postal: Via Conservatorio 7 - 20122 Milano Phone: +39 02 50321522 Fax: +39 02 50321505 Web page: http://www.dagliano.unimi.it/ More information through EDIRC
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Keywords: multinational firms ; productivity ; propensity score matching ; Other versions of this item:
Find related papers by JEL classification: F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business D21 - Microeconomics - - Production and Organizations - - - Firm Behavior C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods
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"Exports versus FDI: An Empirical Test ,"
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"Do constitutions cause large governments? Quasi-experimental evidence ,"
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