Location internationalization and performance of Firms in Italy: a Multilevel Approach

Competition is increasingly global. However, location still matters: often firms cluster in the same geographic areas in order to exploit locational externalities and improve their competitiveness. This paper analyzes how Italian firms’ performance, proxied by their propensity to export, depends both on geographical and institutional context and on individual characteristics. Using a multilevel approach, we estimate and distinguish the effect of individual (firm level) and context (province level) variables on the performance of internationalized Italian firms. We show that both firms and province heterogeneity shape the results.