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Productivity and the international firm: dissecting heterogeneity

Castellani, D. ORCID: and Giovannetti, G. (2010) Productivity and the international firm: dissecting heterogeneity. Journal of Economic Policy Reform, 13 (1). pp. 25-42. ISSN 1748-7870

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To link to this item DOI: 10.1080/17487870903546226


Higher productivity of multinational firms and exporters has been widely documented in the literature, but the sources of this heterogeneity are still a black box. Using an original dataset on Italian firms, we show that higher total factor productivity of international firms can be to some extent explained by higher R&D intensity and managerial capabilities. However, our results suggest that heterogeneity is more in the slope than in the constant of the production function. In particular, allowing international firms to have different return to labour and capital inputs, we are able to account for their entire productivity premium. This has implications for both labour and capital market reforms.

Item Type:Article
Divisions:Henley Business School > International Business and Strategy
ID Code:44406
Publisher:Taylor & Francis

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