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Firms’ Productivity and Internationalisation Choices: Evidence for a Large Sample of Italian Firms

  • Luigi Benfratello

    ()

    (University of Turin and Ceris-CNR)

  • Tiziano Razzolini

    ()

    (University of Turin)

This paper provides evidence on the links between productivity and internationalisation choices for a large sample of both large and small-medium sized Italian firms. By using detailed qualitative and quantitative information we first identify those firms engaged in international activities through exports and/or horizontal FDIs. Following the empirical literature on firm heterogeneity we estimate different measures of Total Factor Productivity and we provide empirical support to the theoretical predictions that there is a productivity ranking among domestic firms, exporters, and FDI performers. By estimating a multinomial logit model, we also control for the effect of variables other than TFP such as size, innovative activity, age, ICT adoption, labour composition, and group membership. As these variables only partially capture the effect of productivity on the probability to engage in foreign markets, we find that the ranking is robust with respect to the inclusion of these additional firm-level characteristics.

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Paper provided by Centro Studi Luca d\'Agliano, University of Milano in its series Development Working Papers with number 236.

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Length: 29
Date of creation: 07 Jan 2008
Date of revision:
Handle: RePEc:csl:devewp:236
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