Foreign ownership of enterprises and employment: the pre‑crisis period in Italy

During the last decades, the amount of foreign ownership of domestic business has exhibited a strong increase at the global level, and now it represents an important share of the world economy. The economic literature widely debates the possible foreign ownership of business spillover effects on employment, the presence of which this paper examines in Italy during a crucial period for the country (2002– 2007), following the introduction of the euro. More specifically, the aim is to esti- mate whether the presence of foreign ownership of business benefits Italian employ- ment or not, discussing its effect on Italian employment levels and the ways in which these effects actually take place: via investment increases, productivity increases and so on. We propose a generalised method of moments (GMM) model using a wide, longitudinal micro dataset of the Italian National Statistical Institute. The results show that foreign ownership of business produced negative effects on employment over the period considered.