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FDI in Business Services has general TFP effects : evidence from Italy

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This paper studies the effect of FDI in business services on Total Factor Productivity of Italian manufacturing firms, over the period 2003-2008. More precisely, the paper tests the impact of forward inter industry linkages at local level. Our results, robust to different specifications, show that foreign capital infl ows improve the performance of domestic manufacturing firms. This relationship is particularly strong in the case of high tech sectors, such as mechanics and machinery. Traditional sectors, on the other hand, seem to be less sensitive to the availability of foreign business services in the same location.

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  • Massimo Armenise & Giorgia Giovannetti & Gianluca Santoni, 2011. "FDI in Business Services has general TFP effects : evidence from Italy," Working Papers - Economics wp2011_12.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    • Handle: RePEc:frz:wpaper:wp2011_12.rdf
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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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