Statistical Analysis of the Country Selection for Italian SMEs

Luciana Dalla Valle and Giovanna Nicolini

No unimi-1081, UNIMI - Research Papers in Economics, Business, and Statistics from Universitá degli Studi di Milano

Abstract: When the choice of one firm's internationalisation regards the establishment of a subsidiary in a foreign country, then internationalization is a very complex process involving many variables. Some of these variables concern the internal organization of the firm - as for example its economic status, growth politics and managerial abilities. Other variables instead are external and lie basically in the characteristicss of the country the firm chooses to open its subsidiary. The internationalization processes, which have mainly drawn researchers' interest, are about large firms; while the internationalization of SMEs (with less than 500 employees), has been less investigated so far. Moreover, the internationalization of SMEs is more hazardous, because these companies are less supported by the governmental authority, so the choice of the country where to open a new subsidiary represents a key element for the success of the firm. The aim of this paper is twofold. On the one hand, we will examine the features of the foreign countries in which Italian SMEs formerly established subsidiaries; on the other hand, we will investigated the consequences of SMEs internationalisation through their economic performance. Through the joint analysis of two variable sets (about countries and about firms) and through the statistical method we are going to implement in the following (hierarchical mixed logit model), we will be able to describe both the most signi cant characteristics of the firms that already opened subsidiaries abroad and the characteristics of the country where the opening took place. Our first step will be selecting the variables for the two datasets, while the second step will be choosing the most suitable model for our purposes. The analysis concerns about 400 firms that started an internationalisation process before 2004.

Keywords: Internationalisation; Cluster analysis; Bayesian mixed logit model (search for similar items in EconPapers)
Date: 2008-12-03
Note: oai:cdlib1:unimi-1081
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