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Firm Heterogeneity and Endogenous Regional Disparities

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  • Carlo Altomonte
  • Italo Colantone

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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File URL: http://www.econ.kuleuven.be/licos/publications/dp/dp161.pdf
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Bibliographic Info

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

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

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Keywords: regional convergence; multinational firms; productivity; transition economies.;

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References

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Cited by:
  1. Francesco Aiello & Fernanda Ricotta, 2014. "Firm Heterogeneity In Productivity Across Europe. What Explains What?," Working Papers 201404, Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica).
  2. Merlevede, Bruno & Schoors, Koen & Spatareanu , Mariana, 2013. "FDI spillovers and time since foreign entry," BOFIT Discussion Papers 27/2013, Bank of Finland, Institute for Economies in Transition.
  3. Davide Castellani & Fabio Pieri, 2011. "R&D Offshoring and the Productivity Growth of European Regions," Working Papers 1120, Department of Applied Economics II, Universidad de Valencia.
  4. Carlo Altomonte & Marcella Nicolini & Armando Rungi & Laura Ogliari, 2010. "Assessing the Competitive Behaviour of Firms in the Single Market: A Micro-based Approach," European Economy - Economic Papers 409, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  5. K. Lenaerts & B. Merlevede, 2012. "Supply Chain Fragmentation and Spillovers from Foreign Direct Investment," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 12/822, Ghent University, Faculty of Economics and Business Administration.
  6. Castellacci, Fulvio, 2010. "Firm heterogeneity, international cooperations and export participation," MPRA Paper 27585, University Library of Munich, Germany.
  7. Juliette Milgram-Baleix, 2009. "Do Spanish firms learn from firms located nearby?," Economic Working Papers at Centro de Estudios Andaluces E2009/09, Centro de Estudios Andaluces.
  8. Ari Kokko & Victoria Kravtsova, 2012. "Regional Characteristics And Effects Of Inward Fdi: The Case Of Ukraine," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 3(2).
  9. Altomonte, Carlo & Nicolini, Marcella, 2012. "Economic integration and the dynamics of firms’ competitive behavior," Structural Change and Economic Dynamics, Elsevier, vol. 23(4), pages 383-402.

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