This paper analyses the role of spatial proximity in productivity spillovers from foreign MNEs. Using a database of foreign affiliates located in Italy from 1999 to 2005, we show that local firms benefit from the presence of MNEs through both backward and forward linkages. We find that: (i) spillover effects are more strongly associated with MNEs in KIBS and utilities; and (ii) co-location positively affects productivity spillovers, but the effect is stronger for foreign affiliates that are distantly located. This is especially true in the service sector, due to the role of temporary spatial proximity and other dimensions of proximity
The paper argues that structural and behavioural determinants combine to influence internationalisation of production through FDI by industrial districts' firms. As far as the former, leadership effects, represented by the presence of large firms within the district, and Porterian effects, denoted by the intensity of domestic rivalry, positively influence the likelihood that district firms will start internationalise through FDI. Moreover, spillovers induced by the presence of foreign-owned MNCs positively impact on the district's degree of internationalisation, provided it has already autonomously developed the ability to grow internationally. As far as behavioural features, previous export relationships increase the district firms' likelihood of undertaking FDI, while innovative capacity joins and strengthens internationalisation processes already started
This article investigates how the ownership of firms (affiliates of foreign multinational firms, or uni-national firms) affects their internal workforce composition. We consider this issue empirically by adopting a novel database on the workforce composition of companies operating in the manufacturing industry in north-east Italy. The workforce composition (in terms of skill level, gender and the less investigated characteristics of age and nationality) of affiliates of foreign multinational enterprises (FMNs) are compared with a counterfactual of uni-national firms, constructed using propensity score matching. Consistent with previous studies, the results report that FMNs recruit a larger number of highly-skilled workers. Our main findings show that FMNs employ a lower number of foreign and less experienced (young) workers. The employment of native and more experienced workers in FMNs seems to suggest that foreign companies use domestic 'inherited' stock of manufacturing knowledge and skills. By using this stock, they contribute to sustaining its development.
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