Entry-Mode Selection and Firm’s Productivity across Market Destinations: An Empirical Investigation

Abstract

This work aims at investigating the productivity premia of three alternative modes of internationalization for a panel of Italian manufacturing firms: FDI, international outsourcing, and exporting. By using simple regression tests we try to investigate whether and to what extent these modes of firm‘s entry into the foreign markets increase the productivity of firms at home. Surprisingly, our findings show that firms that self-select in engaging in exporting have the greatest productivity gains. The findings hold true even when we extend the analysis to geographical country penetrations.