Roberto Antonietti, Raffaello Bronzini, Giulio Cainelli

Inward Foreign Direct Investment and the Birth-Death Rate of Italian manufacturing firms

  • Abstract

Informations and abstract

Keywords: Firm Birth-Death Rate; Crowding-Out; Inward Foreign Direct Investments; Panel Data.

This work investigates the effect of greenfield inward foreign direct investments (FDI) on the net creation of manufacturing firms in Italian provinces. Using an original panel dataset extracted from the merge of the "Movimprese" archive with fDI Markets, we estimate a series of fixed effects models to mitigate endogeneity. Results show that investments in retail trade and in building-related activities are positively linked to the net creation of new manufacturing firms, albeit this effect pertains only medium and high-tech sectors. Investments in wholesale trade, manufacturing and logistics, instead, tend to crowd out incumbent manufacturing activities. Among controls, only innovation and regional population density are related to a positive birth-death rate in manufacturing sectors.

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