Internationalisation, Innovation and Productivity: How Do Firms Differ in Italy?

21 Pages Posted: 20 Jan 2007


This paper addresses the issue of intra-industry heterogeneity and internationalisation. We show that, after controlling for sector, location, firm age and size, Italian manufacturing companies exhibit different economic and innovative performance according to their involvement in foreign activities. In particular, exporters show intermediate innovative performance between non-internationalised firms and those carrying out foreign production. Multinationals with a lower commitment to foreign markets, i.e. with non-manufacturing activities abroad only, exhibit a higher productivity than exporters but they do not appear to innovate more than the latter. Heterogeneity in productivity is robust to controlling for innovation inputs and outputs, suggesting that the difference in economic performance cannot be entirely attributed to different innovative activities, and that the involvement in international operations can be a distinct channel of knowledge accumulation.

Suggested Citation

Castellani, Davide and Zanfei, Antonello, Internationalisation, Innovation and Productivity: How Do Firms Differ in Italy?. The World Economy, Vol. 30, No. 1, pp. 156-176, January 2007, Available at SSRN: or

Davide Castellani (Contact Author)

Henley Business School ( email )

Reading, Berkshire RG6 6UD
United Kingdom

Antonello Zanfei

Universita di Urbino ( email )

Via Saffi 2
Urbino, Pesaro-Urbino 61029

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