Home country effects of investing abroad: Evidence from Italy

Home country effects of domestic firms investing abroad have been a highly debated issue. In particular, following the recent theoretical and empirical literature on firm heterogeneity, an important point that should be investigated is whether the impact of outward FDI on the performance of parent firms might differ according to their level of productivity or their size. Using quantile regressions and a data set for Italian firms investing abroad, this chapter shows that the impact of international expansion on parents’ performance varies across firms in different quantiles of the performance distribution and across foreign affiliates’ geographical locations.