The Italian Firms’ International Activity

We look at business survey data on Italian internationalized firms’ characteristics and performances since the outbreak of the 2008 crisis until 2012. Among Italian firms with 20 employees or more, an increasing share (from 7.1 to 13.2% between 2006 and 2011) owns a foreign productive unit. The main reason for locating units in advanced countries is to be close to outlet markets, this remains true for internationalization in developing countries (where nearly half of such units were located), even though in this case the search for lower costs becomes more important. Italian multinationals are on average more productive and profitable, even when compared to exporting firms not operating abroad. More specifically, the productivity gap compared to these latter firms is 15 percent, closely aligned with that measured by Helpman at al. (2004) on a sample of US firms. Since 2008, internationalized firms’ operating profit was above the average, as well as their planned expansion both in Italy and abroad. In firms’ opinion, the support by Italian public institutions to expand their foreign activity is generally not effective.