IDEAS home Printed from https://ideas.repec.org/p/bdi/wptemi/td_1085_16.html
   My bibliography  Save this paper

Foreign ownership and performance: evidence from a panel of Italian firms

Author

Listed:
  • Chiara Bentivogli

    () (Bank of Italy)

  • Litterio Mirenda

    () (Bank of Italy)

Abstract

The paper studies the impact of foreign ownership on a firm’s economic performance. We use a unique panel dataset to test the foreign ownership premium by comparing our sample of firms based in Italy and owned by a foreign subject with a sample of purely domestic firms that, in order to have a proper counterfactual, were selected using propensity score matching. Our difference-in-differences results show the existence of a premium for the size, profitability and financial soundness of the foreign-owned companies. The premium increases with time, is concentrated in the service sector, and disappears if the foreign investor is based in a fiscal haven.

Suggested Citation

  • Chiara Bentivogli & Litterio Mirenda, 2016. "Foreign ownership and performance: evidence from a panel of Italian firms," Temi di discussione (Economic working papers) 1085, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:wptemi:td_1085_16
    as

    Download full text from publisher

    File URL: http://www.bancaditalia.it/pubblicazioni/temi-discussione/2016/2016-1085/en_tema_1085.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Roger Bandick & Holger Görg & Patrik Karpaty, 2016. "Foreign Acquisitions, Domestic Multinationals, and R&D," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT Volume 53: World Scientific Studies in International Economics, chapter 4, pages 53-77, World Scientific Publishing Co. Pte. Ltd..
    2. Rosario Crinò & Fabrizio Onida, 2007. "Foreign Ownership and Economic Performance in Italy: Not all is Cherry-Picking!," KITeS Working Papers 207, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Nov 2007.
    3. John H Dunning, 1988. "The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 19(1), pages 1-31, March.
    4. Maria Guadalupe & Olga Kuzmina & Catherine Thomas, 2012. "Innovation and Foreign Ownership," American Economic Review, American Economic Association, vol. 102(7), pages 3594-3627, December.
    5. Sourafel Girma & Holger Görg, 2016. "Evaluating the foreign ownership wage premium using a difference-in-differences matching approach," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT Volume 53: World Scientific Studies in International Economics, chapter 2, pages 17-32, World Scientific Publishing Co. Pte. Ltd..
    6. John P. Weche Gelübcke, 2013. "Foreign and Domestic Takeovers in Germany: Cherry-picking and Lemon-grabbing," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 59(4), pages 275-294.
    7. Alessandro Borin & Michele Mancini, 2016. "Foreign direct investment and firm performance: an empirical analysis of Italian firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(4), pages 705-732, November.
    8. Fabian Waldinger, 2012. "Peer Effects in Science: Evidence from the Dismissal of Scientists in Nazi Germany," Review of Economic Studies, Oxford University Press, vol. 79(2), pages 838-861.
    9. Matthias Arnold, Jens & Javorcik, Beata S., 2009. "Gifted kids or pushy parents? Foreign direct investment and plant productivity in Indonesia," Journal of International Economics, Elsevier, vol. 79(1), pages 42-53, September.
    10. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    11. Lucia Piscitello & Larissa Rabbiosi, 2005. "The impact of inward FDI on local companies' labour productivity: evidence from the Italian case," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 12(1), pages 35-51.
    12. Benfratello, Luigi & Sembenelli, Alessandro, 2006. "Foreign ownership and productivity: Is the direction of causality so obvious?," International Journal of Industrial Organization, Elsevier, vol. 24(4), pages 733-751, July.
    13. Bruce A. Blonigen & Lionel Fontagné & Nicholas Sly & Farid Toubal, 2012. "Cherries for Sale: Export Networks and the Incidence of Cross-Border M&A," NBER Working Papers 18414, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aziz Jaafar & Lynn Hodgkinson & Mao-Feng Kao, 2019. "Ownership Structure, Board of Directors and Firm Performance: Evidence from Taiwan," Working Papers 19011, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).
    2. Alexandra Horobet & Lucian Belascu & Ștefania Cristina Curea & Alma Pentescu, 2019. "Ownership Concentration and Performance Recovery Patterns in the European Union," Sustainability, MDPI, Open Access Journal, vol. 11(4), pages 1-31, February.
    3. Ali Shaddady & Faisal Alnori, 2020. "Do Ownership Structure, Political Connections and Executive Compensation Have Multifaceted Effects on Firm Performance? An Alternative Approach," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 12(10), pages 1-22, October.

    More about this item

    Keywords

    multinational enterprise; ownership; foreign direct investment; firm performance;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bdi:wptemi:td_1085_16. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/bdigvit.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.