Are exporters and multinational firms more resilient over a crisis? First evidence for manufacturing enterprises in Italy

The 2008 crisis has called to further investigate the impact of global engagement on firm performance. We focus on the link between Italian firms' involvement in international activities and their heterogenous performance in terms of survival in the context of the recent crisis. This topic has been investigated in the literature comparing foreign and domestic firms, neglecting the behaviour of exporters and of domestic multinationals (DMNEs). Our paper tries to fill this void checking for the impact on firm survival of three different forms of firms global engagement: exporting, investing abroad and being a foreign affiliate. We examine firm failure in Italy before the recent crisis (2002-2007) and after it (2008-2010) using an original database, obtained by matching and merging three firm level datasets: Capitalia, AIDA and Mint-Italy for the period 2002-2010. We estimate a conditional Probit of exit of firms according to their global activities, controlling for a wide range of other relevant firm and industry specific variables (size, age, productivity, financial status). In our results, multinationals appear more volatile, while exporting firms experience reduced exit probabilities. Our results do not support the hypothesis of a stabilising role of multinationals, in line with other studies (Varum and Rocha, 2011; Alvarez and Görg, 2011; Godart et al., 2011). Age, productivity, financial health are also important to understand the firm-level impact of the crisis.