1,720,981 research outputs found
Bilateral investment treaties and backward linkages in Sub-Saharan Africa
No full textThis article is an original contribution to the understanding of the impact of bilateral investment treaties in developing countries. By exploiting a unique sample of foreign affiliates in nineteen Sub-Saharan Africa countries, we show that the presence of a bilateral investment treaty between FDI origin and destination countries is positively related to the propensity of foreign investors to generate linkages to local suppliers. In addition, we find evidence that such relationship is stronger for countries with lower institutional quality and that bilateral investment treaties become more effective the larger the difference in levels of development between source and host. The estimation technique we use is a two-limit Tobit model. Our results are of high importance from a political point of view. They support the argument that bilateral investment treaties can help countries with low levels of governance quality, as several Sub-Saharan African countries, to credibly remedy local institutional inefficiencies and, therefore, the participation in an international treaty make the opportunities for local sourcing more likely. These potential gains can justify the decision of policymakers in developing countries to sign BITs, despite such agreements impinging on their national sovereignty
Economic enclaves or bridges to the global economy? : foreign and diaspora investments in developing countries
Full text linkThis paper examines the main determinants of linkages between foreign and domestic firms in developing countries. Based on existing evidence, we highlight the relevance of linkages generated by MNEs in developing countries and then we discuss the factors which boost or hamper the interactions between foreign and domestic firms and draw some policy implications. A particular attention is given to diaspora investments – i.e. investments carried out by members of the diaspora or return migrants – that represent a potentially powerful engine of growth and structural change in poor countries
Internationalization modes and productivity of Italian manufacturing: Some firm-level evidence
No full textThis paper compares the productivity ranking of alternative modes of internationalization for a
panel of Italian manufacturing firms that are (i) purely domestic or internationally engaged in
(ii) exports, (iii) foreign sourcing and (iv) foreign direct investment. By using consistent tests of
stochastic dominance of first and second order, as well as by estimating productivity premia
across firms for all strategies, we aim at investigating whether and to what extent these modes of
firm's entry into the foreign markets conform to the predictions of both Helpman et al. (2004)
and Antràs and Helpman (2004)'s seminal papers. While our data confirm the hierarchical
theoretical ranking of the traditional moves, no evidence emerges that FDI firms dominate in
productivity foreign sourcing firms. Obviously, our evidence also supports the prediction in the
literature that domestic firms exhibit lower performances compared to their internationally
involved counterpart
The impact of OFDI in global cities on innovation by Indian multinationals
No full textWe investigate the impact of Outward Foreign Direct Investment (OFDI) on the innovation performance of Indian multinationals by analysing their choice of entry mode (cross-border acquisitions versus greenfield investments) and their international location decisions (i.e. choice to locate in a global city). We rely on an augmented fractional logit estimator for 170 foreign investments in high- and medium-high tech manufacturing sectors in the period 2003 to 2011 and find that: (i) compared to greenfield investments, acquisitions generate more technological opportunities; (ii) location in a global city has a negative impact on the Indian companies’ innovation performance; (iii) the positive effect of acquisition decreases if the investment is focused on a global city. These findings should be informative for both firms and government authorities involved in developing going-global strategies
Green foreign direct investments and the deepening of capabilities for sustainable innovation in multinationals: Insights from renewable energy
No full textThere is mounting agreement that the global economy is at the nascent stage of a green transformation. In response, multinational enterprises (MNEs) are seeking to enhance their capabilities for sustainable innovation and many have started to globalise their green efforts. But to what extent and how (if at all) do green Foreign Direct Investments (FDIs) contribute to the deepening of sustainability capabilities? To address this question, we employ a novel dataset of 1217 green FDI in renewable energy sectors worldwide, during the period 1997 to 2015. A propensity score matching and difference-in-difference econometric strategy provides three main results. First, green FDIs enhance the overall orientation to sustainability of MNEs. They have both a greening effect on the firms’ overall technology bases and increases specialization in specific green technologies. Second, green FDIs have a significant positive impact on the degree and quality of MNEs innovative capacity in sustainable technologies. In other words, the MNEs extend their innovative capabilities towards more sustainability-oriented direction and strengthen their innovation activities related to green technologies. Third, we find that the globalisation process mode matters: in the long run, green FDIs result in newly-established subsidiaries contributing more to innovativeness and greening than acquisition of foreign firms. These findings have important implications for policies designed to increase the sustainability transition
Internationalization Modes and Productivity of Italian Manufacturing: some firm-level evidence
No full textThis paper compares the productivity ranking of alternative modes of internationalization for apanel of Italian manufacturingfirms that are (i) purely domestic or internationally engaged in(ii) exports, (iii) foreign sourcing and (iv) foreign direct investment. By using consistent tests ofstochastic dominance offirst and second order, as well as by estimating productivity premiaacrossfirms for all strategies, we aim at investigating whether and to what extent these modes offirm's entry into the foreign markets conform to the predictions of bothHelpman et al. (2004)and Antràs and Helpman (2004)'s seminal papers. While our data confirm the hierarchicaltheoretical ranking of the traditional moves, no evidence emerges that FDIfirms dominate inproductivity foreign sourcingfirms. Obviously, our evidence also supports the prediction in theliterature that domesticfirms exhibit lower performances compared to their internationallyinvolved counterpart
Offshore-sourcing strategies and the puzzle of productivity: a micro-level analysis
No full textPurpose - The purpose of this paper is to assess whether offshoring strategies are able to substantially enhance firms' international competitiveness in terms of productivity, innovativeness and skill composition for a panel of Italian manufacturing firms. Design/methodology/approach - A set of hypotheses derived from the extant literature is tested on data from balance sheets and qualitative surveys of about 4,000 Italian firms. The methodology used is a propensity score matching estimator and difference in differences method that allowed the authors to detect the causal effect of the offshoring status of the firms on some performance measures. Findings - Results demonstrate that offshoring increases the propensity to innovate and the skill ratio of workers but does not show a significant association with productivity growth. The estimates are robust in all the specifications. Research limitations/implications - The results are applicable to Italian firms. The magnitude and timing of the effects may vary across firms and countries. Originality/value - This paper contributes to the empirical literature on offshoring by exploring its impact on a variety of firms' performance measures by using matching techniques that allow us to investigate more in depth the causality link of the relationship and to control for the self-selection effect (more productive firms self-select to offshore)
Innovativeness, Offshoring and Black economy Decisions. Evidence from Italian Manufacturing Firms
No full textFollowing recent models in international trade this paper examines the characteristics that businesses
should possess to pursue internationalization strategies. We do this in the peculiar context of Italy, the
G-7 country with the largest share of the black economy in GDP. Specifically, we posit that Italian
manufacturing firms may use three strategies to counter the competitive threats by emerging
economies: (i) improve the innovative content of their products (ii) venturing into offshoring, or,
alternatively, (iii) entering the black economy. We estimate the impact of these moves with firm-level
data drawn from two waves of the Italian Manufacturing Survey (IMS) covering a six-year period (1998–
2003). We find that offshoring firms are larger, more innovative, have higher capital/labour ratio and are
located in provinces where the share of the black economy is lower. Firms belonging to provinces in
which the share of the black economy is larger are less likely to choose the internationalization mode.
The offshoring-black economy nexus bears relevant policy implications. In particular, vis-a` -vis their
offshoring companions, firms choosing to enter the black economy may be producing negative spillover
effects by lowering productivity and the propensity to innovate
Greenfield investments or Acquisitions? How do Indian multinationals acquire knowledge investing in global cities
No full text- …
