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Financial crisis, internationalization choices and Italian firm survival

Author

Listed:
  • Costa, Stefano
  • Pappalardo, Carmine
  • Vicarelli, Claudio
Abstract
In this paper we focus on the relationship between internationalization choices and survival of Italian firms during the financial crisis. Making use of a new database matching four firm-level datasets provided by the Italian National Statistical Institute (ISTAT), we build a detailed taxonomy of internationalization activities of Italian firms in 2007 and 2010, before and after the financial crisis. Descriptive analyses confirms that firms showing a more complex form of internationalization have higher levels of efficiency, as well as higher diversification of production, measured in terms of the variety of exported goods. Indeed, over the period 2007-2010 Italian firms have moved (on average) towards more complex forms of internationalization. These upwards changes have determined positive effects on employment dynamics and value added growth. For each class of internationalization we estimate a conditional Probit of survival according to the level of productivity and controlling for firm and industry specific variables. Our results show that multinational firms (at the top of our taxonomy) show a lower resilience during the crisis with respect “global” or “two-way traders”, playing a minor role of stabilizers with respect to domestic owner firms. These findings put more emphasis on issue of the diversification of products and markets as a goal to be pursued by firms, even in times of crisis such as the current ones, to remain competitive, make profits and survive.

Suggested Citation

  • Costa, Stefano & Pappalardo, Carmine & Vicarelli, Claudio, 2014. "Financial crisis, internationalization choices and Italian firm survival," MPRA Paper 54107, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:54107
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    File URL: https://mpra.ub.uni-muenchen.de/54107/1/MPRA_paper_54107.pdf
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    References listed on IDEAS

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    Cited by:

    1. Peter S. Eppinger & Nicole Meythaler & Marc-Manuel Sindlinger & Marcel Smolka, 2018. "The great trade collapse and the Spanish export miracle: Firm-level evidence from the crisis," The World Economy, Wiley Blackwell, vol. 41(2), pages 457-493, February.
    2. Joachim Wagner, 2016. "A survey of empirical studies using transaction level data on exports and imports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(1), pages 215-225, February.

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    More about this item

    Keywords

    heterogeneous firms; internationalization; survival premia; financial crisis.;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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