A MULTIVARIATE FRAMEWORK TO EXPLORE FIRMS’ INTERNATIONALIZATION PATTERNS. THE ROLE OF INDIVIDUAL HETEROGENEITY

Pinuccia Calia and Maria Ferrante

Statistica, 2008, vol. 68, issue 1, 31-55

Abstract: In this paper, we explore the internationalization pattern of firms and its relationship with the firms’ heterogeneity. Besides the more traditional exports and Foreign Direct Investments (FDI), we consider various forms of non-equity internationalization. The use of a Multivariate Probit Model allows us to assess the associations among the choices driving the firms’ internationalization strategy as a whole and, at the same time, to avoid a priori assumptions on the internationalization pattern. From the empirical evidence, two main results emerge. At first, we observe that Italian firms jointly adopt various internalization forms, others than export and FDI, conditionally to characteristics of the firms. The hypothesis reported in literature of a complementary or subsidiary relationship between exports and FDI is then confirmed also for non-equity internationalization forms. Secondly, we find that the heterogeneity of firms, measured by a large range of variables, has an important role in defining the choice of firms on the pattern of internalization. Thus in this context, we endorse the emerging opinion asserting that various dimensions other than productivity are relevant.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:bot:rivsta:v:68:y:2008:i:1:p:31-55

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