1. Firms’ productivity and Internationalization choices: evidence from a large sample of Italian firms Discussion Torino February 23, 2007

2. Internazionalizzazione e sistema produttivo 2 Benfratello-Razzolini They analyze the relationship between productivity and internationalization. Using the Capitalia survey, they are able to disentangle horizontal from vertical FDI and control for R&D propensity, investment in ICT, capital-labor ratio..., …and (added) age and group: old firms internationalize more, group membership affects the choice horizontal FDI but not export. Although without solving the problem of endogeneity, they prove the positive relationship between productivity and internationalization.

3. Internazionalizzazione e sistema produttivo 3 A surprising result “R&D propensity plays no role in export and FDI is quite new […] and needs further investigation” (pag. 13)

4. Internazionalizzazione e sistema produttivo 4 Suggestion 1 Control for territorial pattern of export and FDI Belderbos-Sleuwagen [1996], Fukao et al. [1994], and Tomiura [2003] on Japanese manufacturing: R&D affect FDI in industrialized countries, but not FDI in developing countries. (The Capitalia survey includes information on countries of destination)

5. Internazionalizzazione e sistema produttivo 5 Suggestion 2 Control for innovation activities The Capitalia Survey allows it Product innovation and organizational innovation seem to affect FDI more than export

6. Internazionalizzazione e sistema produttivo 6 Suggestion 3 Control for interrelationship between exports and FDI Aizenman 2005: 50% is FDI=>exports, 31% exports=>FDI, and the rest simultaneity Run also estimations for export and FDI+export separately

7. Internazionalizzazione e sistema produttivo 7 Suggestion 4 (Dedicated to Riccardo) Control for quality of manpower B-R use a two factor production function. Head-Ries [2003] use a four factor production function, including skilled and unskilled workers.

8. Internazionalizzazione e sistema produttivo 8 Suggestion 5 Use the panel data

9. Internazionalizzazione e sistema produttivo 9 International banking The role of banking in favoring internationalization: this issue is neglected both in the theoretical papers and in the empirical ones. (The Capitalia Survey allows some empirical exploration) Do banks follow industrial firms or industrial firms need international banks to go international? A theoretical issue: FDI without export

10. Internazionalizzazione e sistema produttivo 10 Suggestion 4 Control for sectoral pattern (specialization) Head-Ries [2003]