Firm Heterogeneity and Endogenous Regional Disparities

LICOS Discussion Paper No. 161/2005

36 Pages Posted: 8 Feb 2006

See all articles by Carlo Altomonte

Carlo Altomonte

Bocconi University - Department of Policy Analysis and Public Management

Italo Colantone

Bocconi University

Multiple version iconThere are 2 versions of this paper

Date Written: 2005

Abstract

We exploit the census of Romanian firms to provide a microfounded analysis of the sources of regional disparities in the country. To this extent, we adapt to the regional case a decomposition of firm-level output dynamics based on semi-parametric productivity estimates. The methodology, robust to different techniques of TFP estimation, allows us to analyze the sources of regional disparities controlling for the heterogeneity in firms' characteristics. In particular, we measure various compositional effects of multinational enterprises (MNEs)on regional growth, finding that regional disparities are to a large extent endogenous to the interaction between firm-level dynamics and initial market conditions.

Keywords: regional convergence, multinational firms, productivity, transition economies

JEL Classification: F12, F23, L10, P20

Suggested Citation

Altomonte, Carlo and Colantone, Italo, Firm Heterogeneity and Endogenous Regional Disparities (2005). Available at SSRN: https://ssrn.com/abstract=881536 or http://dx.doi.org/10.2139/ssrn.881536

Carlo Altomonte (Contact Author)

Bocconi University - Department of Policy Analysis and Public Management ( email )

Via Roentgen 1
Milan, 20136
Italy

Italo Colantone

Bocconi University ( email )

Via Sarfatti, 25
Milan, MI 20136
Italy

Register to save articles to
your library

Register

Paper statistics

Downloads
71
rank
319,741
Abstract Views
517
PlumX Metrics