This paper empirically analyzes the boundaries of a large sample of Italian multinational enterprises, with firm-level data from Capitalia, AIDA and Centrale dei Bilanci. Within the broad array of feasible contracts in a foreign country, we focus on the trade-off between international outsourcing and Foreign Direct Investment (FDI), in a context of contractual incompleteness. Probit estimates reveal that Italian enterprises operating in highly relation-specific environments are more prone to international outsourcing than FDI, consistently with recent theoretical contributions on the topic. Results are robust to different specifications and alternative measures of contractual incompleteness and international outsourcing.
Gattai, V. (2013). International Outsourcing versus FDI under Contractual Incompleteness. INTERNATIONAL REVIEW OF ECONOMICS, 60(2), 157-186 [10.1007/s12232-013-0181-5].
International Outsourcing versus FDI under Contractual Incompleteness
Gattai, V
2013
Abstract
This paper empirically analyzes the boundaries of a large sample of Italian multinational enterprises, with firm-level data from Capitalia, AIDA and Centrale dei Bilanci. Within the broad array of feasible contracts in a foreign country, we focus on the trade-off between international outsourcing and Foreign Direct Investment (FDI), in a context of contractual incompleteness. Probit estimates reveal that Italian enterprises operating in highly relation-specific environments are more prone to international outsourcing than FDI, consistently with recent theoretical contributions on the topic. Results are robust to different specifications and alternative measures of contractual incompleteness and international outsourcing.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.