This paper delves into the vulnerability of Italian firms to foreign demand and supply. It introduces a novel, dual indicator of vulnerability to imports and exports, identifying the most vulnerable production segments, along with the countries, products and sectors involved. We evaluate vulnerability focusing on the product and geographical concentration of firms' transactions and on firms’ level of engagement in international trade, measured by export propensity (export-to-turnover ratio) and import incidence (import-to-intermediate costs ratio). Regarding import vulnerability, also the type of imported products, identifying "Foreign Dependent Products" (FDPs), is considered. Our findings show that a small number of Italian firms are vulnerable to foreign demand and supply, although they account for a non-negligible shares of total value added and trade, with a clear sectoral heterogeneity. United States and Germany emerge as the countries towards whose demand Italian firms are mostly vulnerable, due to a higher product concentration and a higher geographical concentration of export, respectively. On the import side, Italian firms are mainly vulnerable towards Germany and China, because of geographical concentration of import but with a poor role of FDPs (especially for China).Finally, our estimates show that in 2019-2022, for exporters the shift from non-vulnerable to vulnerable status was mostly driven by an increase in geographical concentration of sales and export propensity. For importers, the move was determined by increased use of FDPs. In this troubled period, vulnerable firms performed worse than non-vulnerable ones, confirming the capacity of our indicator to grasp actual vulnerability of firms.

Our goal is to present a new classifier of economic-financial solidity (EFSI) of Italian firms, which can be used to assess the evolution of Italian firms’ economic and financial structure. In particular, considering profitability, solidity and liquidity (all evaluated in terms of their sustainability over time) we classify firms in four classes: Healthy, Fragile, At-risk, Highly at-risk. We find that in 2011–2020 a strengthening of economic and financial structure took place in the Italian business system, a trend that continued also during the pandemic year. To investigate this latter aspect, we consider the entry of firms into the EFSI Highly at-risk class (“downgrades”) in 2019–20. Using a matching technique, we run two exercises, comparing the downgrade rates in 2019–20 (Covid-19 crisis) versus 2011–12 (sovereign debt crisis) and successively versus 2018–19 (the last pre-pandemic year of economic growth), considering the firms with the same structural and economic characteristics in the two pairs of periods. Our results argue that, with respect to pre-Covid year, Governmental aid has limited the negative consequences of the pandemic especially on the smaller firms (those more severely hit by the crisis); with respect the 2011–12 crisis, in several sectors the support measures more than fully compensate for the negative effects of the pandemic, notwithstanding its stronger economic impact on GDP than the previous crisis episode.

This paper aims at identifying the potential mismatch between the conditions required for a firm to become an exporter and the pattern of technology adoption within its industry. In particular, we obtain a new taxonomy of exporting and non-exporting firms by using a “technology line” and an “export threshold” (estimated using the Receiver Operating Characteristics – ROC methodology). The export threshold is the minimum combination of productivity and economic size that firms need to achieve in order to access international markets; the technology line is the technology which the export threshold firm would have if its combination of productivity and economic size was consistent with a higher-than-average technology within the industry. By this way, we are able to highlight the presence of “potential” exporters (firms that do not export even if they have the technological characteristics to do it) and “fragile” exporters (firms that do export despite their technology gap). This empirical approach allows to better qualify “empirical anomalies”, paving the way to a more precise targeting for industrial policies. We propose an empirical tool for policy makers to identify what aspects need to be stimulated (size, productivity or technology) to induce firms to access or consolidate their presence on foreign markets. In particular, applying a methodology widely used in medicine (the Receiver Operating Characteristics — ROC approach), we obtain a new taxonomy of exporting and non-exporting firms, which for each manufacturing sector detects the possible presence of “potential” exporters (i.e. firms that do not export even if they have the technological characteristics to do it) and “fragile” exporters (i.e. firms that do export despite their technology gap). This allows to design more targeted policies, thus increasing their effectiveness and, eventually, reducing costs to Governments, which is all the more important for countries with more stringent budgetary constraints.

In this paper we study the structural robustness of the Italian business system, using the Covid-19 pandemic as an exogenous event to test it. To this aim, we use the ROC (Receiver Operating Characteristics) methodology, quite new for economics, to classify Italian firms according to their economic solidity, obtaining a taxonomy based on a wide set of characteristics. Our results show that the number of “Solid” firms is less than one-fifth of all Italian enterprises but they represent the lion’s share in terms of employment and value added. “Fragile” and “At Risk” firms, albeit much less relevant for the creation of value added, account for over one-third of total employment, so they may be a worrisome issue for policymakers. Solidity conditions have clearly both a size and sector-related dimension: At Risk and Fragile conditions prevail among firms of smaller economic size (a broad definition of firm size) and among those operating in Construction and Other services. Finally, we find that factors such as firms’ performance, and internal and external organization, although significant, play a less relevant role than economic size and digitalization/innovation in determining Italian firms’ resilience to exogenous shocks such as the Covid-19 one.

Applying the social network analysis to domestic and international input–output tables, we position the Italian sectors within their trade networks to analyze their ability to transmit economic shocks within the economic system. In this context, we propose a new taxonomy that classifies sectors in terms of the extent to, and the speed at, which they tend to spread domestic and foreign impulses throughout the Italian economic system. Our results show a mismatch between the industries which have a central position within international trade network and industries which play a central role for the domestic propagation of shocks. In this vein, the capacity of transmitting stimuli from abroad is limited, weakening the possibility to benefit from positive shocks, even though it could partially provide a shelter from negative one in the international business cycle.

In this paper we study the direct and indirect contributions of firms to the co-movements between Italian business cycle and those of the 10 main trading partners. In doing so, we follow the approach developed by di Giovanni et al. (Am Econ Rev 108(1): 82–108, 2018) considering the 2005–2017 period, during which Italian economy experienced two different crises. Moreover, we propose a refinement in the estimation methodology originally used in the related literature by applying fractional response models for panel data, in order to take into account the bounded nature of data. Our findings show that firms’ trade linkages largely prevail over productive ones to explain the correlation between Italian firms’ value added and trading partners GDP growth. Furthermore, in presence of a small group of internationalized firms and a large group of small and not internationalized firms, the Italian business cycle correlation is mainly explained by the former group, because of both their direct links and indirect activation effects on the rest of the system. Our empirical approach also shows that using a linear FE estimator would result in a biased estimation of both indirect and direct effects.

The paper studies the structural robustness of Italian business system, using Covid-19 pandemic as an exogenous event to test it. The Receiver Operating Characteristics methodology, quite new for Economics, is used to classify firms based on their structural and behavioral characteristics. “Solid” firms are less than one fifth of Italian enterprises but represent the majority of employment and value added. “Fragile” and “Risky” firms, albeit much less relevant for the creation of value added, account for over one third of total employment, so that they are a worrisome issue for policy makers. Risky and Fragile conditions prevail among firms with smaller economic size (a broad definition of firm size) and among those operating in Construction and Other services. Moreover, factors such as firms’ performance, internal and external organization, play less a relevant role than economic size and digitalization/innovation in determining Italian firms’ solidity to shocks such as the Covid-19 one.

Making use of domestic and international input-output tables and network analysis indicators, we analyze international and domestic trade relationships of Italian industries looking at their ability of transmission of shocks. To do this, we also propose a new taxonomy being able to distinguish sectors in terms of the extent to, and the speed at, which they spread domestic and foreign economic shocks into the Italian production system. Our results show a mismatch between sectors having a central position in terms of trade relationships with foreign countries and those having a central role for the propagation of shocks within the Italian economic system. Only a small group of sectors has both a high openness to international markets and a central position within the network of Italian production system. It follows that the domestic transmission capacity of stimuli from abroad is limited: this aspect strongly compromises the possibility of benefiting from positive shocks deriving from increases in foreign demand, even if it could represent, at least in part, a safeguard element in the event of negative impulses deriving from the trend of the international economic cycle.

This paper provides new insights on Italian manufacturing firms participation in international markets in 2016. In particular, we are able to position each firm with respect to an “export threshold” and a “technology line”. The former – which is estimated on the basis of the ROC methodology – is the minimum combination of productivity and “economic size” (a broad measure of firm size composed of employment, age, turnover and capital intensity) that firms need to achieve in order to access international markets. In turn, the technology line, estimated starting from a stochastic frontier model, is the combination of economic size and productivity that is representative of firm’s industry. The interaction between the technology line and export threshold permits: (1) to define a classification of firms (“Natural exporters”, “Locals”, “Smarts”, “Potential exporters”) which is particularly relevant from a policy-making point of view; (2) to compare, for each industry, the relative importance of firms’ economic size and productivity in determining export threshold and technology line, in order to have a measure of the “export friendliness” of industries. JEL code: F14, L60, L11

We identify the minimum combinations of productivity and “economic size” that Italian manufacturing firms need to achieve in order to access international markets. These “export thresholds” are estimated by applying, for the first time in economics, the ROC (receiver operating characteristics) methodology. In this way, we detect a model‐based (rather than a subjectively determined) cut‐off that allows to identify exporters and nonexporters and provides a measure of each firm’s distance from the export threshold. This methodology also paves the way to investigate other determinants of thresholds, thus helping to design more effective policy interventions to reduce barriers to trade.

We focus on the relationship between internationalization choices and performance of Italian firms during the first period of the financial crisis (2007–2010). Making use of a new firm-level database, we build a six-class taxonomy of firms’ internationalization activities; then we estimate firms’ performance as a function of internationalization forms, also estimating propensity score and Heckman selection models in order to control for endogeneity and sample selection bias. Over the period 2007–2010, Italian firms moved (on average) towards more complex forms of internationalization. Empirical analysis finds that these upward changes are related with positive effects on firms’ (labour) productivity, also in a period characterized by the 2009 trade collapse. These findings put additional emphasis on the issue of the diversification of both products and markets as a goal to be pursued by firms, even in times of crisis, to remain competitive and make profits.

The paper examines the effects on Italian manufacturing firms of trade cost reduction due to the introduction of the euro over the period 1996–2004. Using the gravity approach and a difference-in-differences (DID) empirical strategy, the results reveal the importance of properly controlling for heterogeneity. The euro’s effect on the performance of exporting firms is estimated not to be statistically significant when considering eurozone destination markets as a whole. Nevertheless, an increase of flows to ‘peripheral’ eurozone countries is channelled through the intensive margin. When heterogeneity in terms of firm-level labour-productivity is controlled for, a competition effect emerges in core markets, with a reduction of the intensive margin for less productive firms and an increase for the more productive ones. Finally, more financial contrained firms decreased the extensive margin in core markets, regardless of their productivity level.

Over the past decade, the gravity equation has emerged as the empirical workhorse in international trade to study the ex-post effects of trade policies on bilateral trade. In this paper we are concerned with the issue of how the econometric specification and the policy measurement choices can affect the goal to obtain accurate estimates of the coefficient associated with bilateral trade policies within a theoretically-consistent model. The problem is even more serious when the policy treatment is approximated through dummies as it is still often the case in the literature. Using a Monte Carlo simulation analysis, this paper shows that the use of fixed effects to control for unobserved heterogeneity leads to biased estimates of the policy impact even when the policy is measured through a continuous variable. The bias highlighted by our results is the combination of measurement error about bilateral trade costs (or preferences) and the specification used to proxy multilateral resistance terms.

The paper analyzes the Italy's export performance in 2010-2014, from a macro-, mesoand microeconomic point of view. Firstly, we show that Italian export shares remained stable among main European countries, also in a period of growing competitive pressures. However, the input-output analysis reveals that the positive effects of the foreign demand on the Italian economy growth is somehow limited (with respect to Germany case) by a structure of intersectoral relations characterized by lower activating power. Finally, on the microeconomic side, we point out that the internationalization of Italian firms has high extensive margins (number of exporters) but very limited intensive margins (firm's export-to turnover ratio). This result, along with the evidence of better performance for the highly-internationalized firms, suggests that the Italian export competitiveness might be fostered by a (further) increase of the number of exporters, an increase of the openness degree of firms already operating on international markets, and (above all) a shift towards more complex forms of internationalization.

In this paper we explore the BACI-CEPII database using Network Analysis. From the visualization of the World Trade Network, we define and describe its topology, both in its binary version and in its weighted version, by calculating and discussing a number of the commonly used network statistics. We finally discuss various specific topics that can be studied with Network Analysis and International Trade data, both at the aggregated and at the sectorial level. The analysis is carried out with multiple software (Stata, R and Pajek). The scripts to replicate part of the analysis are included in the appendix and can be used as a hands-on tutorial. Moreover, local and global centrality measures, based on the unweighted and the weighted version of the aggregated World Trade Network, have been calculated for each country (178 in total) and each year (from 1995 to 2010) and can be downloaded from the CEPII webpage.

In this paper we focus on the relationship between internationalization choices and survival of Italian firms during the financial crisis. Making use of a new database matching four firm-level datasets provided by the Italian National Statistical Institute (ISTAT), we build a detailed taxonomy of internationalization activities of Italian firms in 2007 and 2010, before and after the financial crisis. Descriptive analyses confirms that firms showing a more complex form of internationalization have higher levels of efficiency, as well as higher diversification of production, measured in terms of the variety of exported goods. Indeed, over the period 2007-2010 Italian firms have moved (on average) towards more complex forms of internationalization. These upwards changes have determined positive effects on employment dynamics and value added growth. For each class of internationalization we estimate a conditional Probit of survival according to the level of productivity and controlling for firm and industry specific variables. Our results show that multinational firms (at the top of our taxonomy) show a lower resilience during the crisis with respect “global” or “two-way traders”, playing a minor role of stabilizers with respect to domestic owner firms. These findings put more emphasis on issue of the diversification of products and markets as a goal to be pursued by firms, even in times of crisis such as the current ones, to remain competitive, make profits and survive.

I Working Papers del Dipartimento di Economia svolgono la funzione di divulgare tempestivamente, in forma definitiva o provvisoria, i risultati di ricerche scientifiche originali. La loro pubblicazione e soggetta all'approvazione del Comitato Scientifico. Per ciascuna pubblicazione vengono soddisfatti gli obblighi previsti dall'art. l del D.L.L. 31.8.1945, n. 660 e successive modifiche. Copie della presente pubblicazione possono essere richieste alla Redazione.