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Firm Heterogeneity and Endogenous Regional Disparities

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Author Info
Carlo Altomonte
Italo Colantone

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Abstract

We exploit the census of Romanian firms to provide a microfounded analysis of the sources of regional disparities in the country. To this extent, we adapt to the regional case a decomposition of firm-level output dynamics based on semi-parametric productivity estimates. The methodology, robust to different techniques of TFP estimation, allows us to analyze the sources of regional disparities controlling for the heterogeneity in firms’ characteristics. In particular, we measure various compositional effects of multinational enterprises (MNEs)on regional growth, finding that regional disparities are to a large extent endogenous to the interaction between firm-level dynamics and initial market conditions.

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Paper provided by LICOS - Centre for Institutions and Economic Performance, K.U.Leuven in its series LICOS Discussion Papers with number 16105.

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Length: 36 pages
Date of creation: 2005
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Handle: RePEc:lic:licosd:16105

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Related research
Keywords: regional convergence multinational firms productivity transition economies.

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Find related papers by JEL classification:
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General

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    Other versions:
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