Do FDI in Business Services Affect Firms’ TFP? Evidence from Italian Provinces

  • Massimo Armenise
  • Giorgia Giovannetti
  • Gianluca Santoni
Part of the AIEL Series in Labour Economics book series (AIEL)

Abstract

This chapter studies the effect of FDI in business services on total factor productivity (TFP) of Italian manufacturing firms, over the period 2003–2008. More precisely, the chapter tests the presence of vertical linkages between foreign business professionals and domestic manufacturing firms. Our results, robust to different specifications, show that foreign capital inflows in business services 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.

Keywords

Business services FDI Manufacturing Panel data Productivity 

Notes

Acknowledgements

We wish to thank M. Belloc, L. Benfratello, G. de Arcangelis, F. Luchetti, R. Marimon, M. Sanfilippo, and participants of International Conference “The role of business services for innovation, internationalization and growth”, Rome, 2010. G. Giovannetti thanks firb for financial support. This research is carried out in collaboration with ICE-Italian Institute of Foreign Trade. The chapter’s findings, interpretations, and conclusions are entirely ours as any remaining mistake.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  • Massimo Armenise
    • 1
  • Giorgia Giovannetti
    • 2
  • Gianluca Santoni
    • 3
  1. 1.ISTATRomaItaly
  2. 2.European University Institute and Fondazione Manlio MasiUniversity of FlorenceFlorenceItaly
  3. 3.Institute of EconomicsSant’Anna School of Advanced StudiesPisaItaly

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