The Role of Science and Multinationals
Edited by Grazia D. Santangelo
Chapter 8: Multinationality and Innovative Behaviour in Italian Manufacturing Firms
8. Multinationality and innovative behaviour in Italian manufacturing ﬁrms Davide Castellani and Antonello Zanfei 1. INTRODUCTION Over the past decade there has been a remarkable increase in the foreign ownership of assets in Europe. This has attracted the interest of both scholars and practitioners in the eﬀects of inward investments, and inter alia in technological opportunities provided by foreign ﬁrms in advanced economies. From this perspective, a key issue is whether and to what extent foreign-owned companies possess superior technology as compared to domestic ﬁrms. Several empirical studies have attempted to address this issue by analysing diﬀerences in productivity of foreign and domestic companies, controlling for a number of attributes of ﬁrms. There is substantial evidence that foreign-owned ﬁrms outperform domestic ﬁrms in host countries, but more recent works have shown that multinationality is more relevant than foreign ownership as a determinant of performance gaps (see Bellak, 2002 for a review). In particular, foreign-owned ﬁrms, which are by deﬁnition multinational companies, exhibit a higher productivity as compared to domestic uni-national ﬁrms, while non-signiﬁcant (or even negative) diﬀerences emerge with reference to domestic multinationals (Doms and Jensen, 1998; Pfaﬀermayer and Bellak, 2002; Bellman and Jungnickel, 2002; Criscuolo and Martin, 2003; De Backer and Sleuwaegen, 2003). This is consistent with the theory that ﬁrms, whether foreign or domestic owned, need to have some form of ex ante advantage in order to be able to compete in international markets (Dunning, 1970; Caves, 1974; Markusen, 1995). And it...
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