2003), “Does investing abroad affect performance at home? Comparing Italian multinational and national enterprises”, Centro Studi Luca D’Agliano Development Studies WP

Foreign activities of MNEs have important effects on home economies. The debate is ambiguous: concerns that foreign investments may deplete domestic economies are often coupled with the pride for doing good business in foreign countries. This paper addresses these concerns by measuring performances at home (output, employment and TFP growth) of a sample of Italian firms which have invested abroad. The novelty of the paper is that we address the question of ‘what would have happened the firm had not invested?’. Investing firms are compared to a counterfactual of firms which have not invested abroad, constructed using propensity score matching, and we find that the formers outperform national firms with similar caractheristics. This result supports a positive causal effect of investment abroad on performance at home