The global operations of European firms - The second EFIGE policy report

Publishing date: 21 July 2011
Authors: Carlo Altomonte Giorgio Barba Navaretti

This Bruegel blueprint analyses, within the framework of the EFIGE (European Firms in a Global Economy) project, the export and foreign investment performance of European firms. It is based on new cross-country data from 15,000 individual firms never available before.

Written by Giorgio Barba Navaretti, Matteo Bugamelli, Gianmarco Ottaviano and Fabiano Schivardi, the report looks at the specific elements that make some European companies more competitive than others in foreign markets, revealing that firm characteristics -mainly size- are the primary determinants of export performance, even more so than country characteristics. Therefore the authors suggest that firm growth and consolidation in all European countries would generate a considerable increase in the value of European exports and thus help lift European growth.

These findings will be crucial for policymakers, who, in order to boost the chance of European firms’ on foreign markets, should shift the policy discussion from the current focus on specific sectors and skill groups to structural reforms that allow firms across the board to grow and to develop more sophisticated forms of management.

Until now, evidence on European firms’ competitiveness has been based on partial, non-comparable national data. But for the first time this paper is based on detailed results from a new large-scale survey of 15,000 manufacturing companies in seven EU countries (Austria, France, Germany, Hungary, Italy, Spain and the United Kingdom). The survey examines firms’ exporting, importing, outsourcing and foreign investment activities. This survey data has then been combined with structural data about the individual firms taken from their balance-sheets such as governance, profits, number of employees.

About the authors

Carlo Altomonte

Carlo Altomonte is Professor of Economics of European Integration at the Social and Political Sciences Department of Bocconi University, and a core faculty member of SDA Bocconi School of Management, where he teaches International Business Environment. He has received the SDA Bocconi Teaching Excellence Award in 2007 and the Bocconi Teaching Innovation Award in 2016. He has been a founder, and the first Director, of the World Bachelor in Business, a unique undergraduate triple degree in Business jointly developed by Bocconi University, the University of Southern California and the Hong Kong University of Science and Technology.

He is currently the Director of the Globalization and Industry Dynamics unit at the Baffi-Carefin centre of research of Bocconi University, a Non Resident Fellow at Bruegel, a EU think tank, and a Senior Researcher at ISPI, the Italian centre of Studies on International Politics. He has been visiting scholar at the Centre of Economic Performance of the London School of Economics and at the Research Department of the European Central Bank. He has been a visiting professor at the Paris School of Economics (Panthèon-Sorbonne, Paris, France) and KU Leuven (Belgium), and has held short teaching courses at the Wagner School of Government (NYU, New York), Keio University (Tokyo), Fudan University and CEIBS (Shanghai) among others.

He has been regularly acting as consultant for a number of national and international institutions, including the Italian Government, the United Nations (UNCTAD), the European Parliament, the European Commission and the European Central Bank, analysing the role of international trade and investment and their implication for competitiveness.

His main areas of research and publication are international trade and investment, the political economy of globalization and its implication on competitiveness. He has published in several leading academic journals, among which Journal of Industrial Economics, European Economic Review, Economic Policy, International Journal of Industrial Organization, Journal of Economic Geography, Journal of International Business Studies, Oxford Bulletin of Economics and Statistics.
Giorgio Barba Navaretti

Giorgio Barba Navaretti is Professor of Economics at the University of Milan, and Scientific Director of the Centro Studi Luca d’Agliano. He has a PhD in Economics fromOxford University and a Degree in Economics fromBocconi University.

He has been aconsultant to the World Bank, Organisation for Economic Cooperation and Development,European Commission, UNICEF and the Italian Ministry of Foreign Affairs. He isspecialised in international and development economics. He is the coauthor ofMultinationals in the World Economy with Anthony J. Venables (Princeton UniversityPress, 2004; Le multinazionali nell’economia mondiale, Il Mulino, 2006). He writes acolumn for Il Sole 24 Ore.