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Does firm heterogeneity affect foreign market entry and exit symmetrically? Empirical evidence for French firms

Dirk Engel, Vivien Procher () and Christoph Schmidt

Journal of Economic Behavior & Organization, 2013, vol. 85, issue C, 35-47

Abstract: This paper studies the internationalization behaviour of French companies using more than 330,000 observations for three two-year intervals. We analyse the ‘symmetric’ role of productivity and other major firm attributes to characterize companies that enter into and exit from foreign markets. High levels of productivity are documented to be characteristic of companies deciding to engage in exporting or foreign direct investment (FDI). However, there does not seem to be a significant correlation between productivity and divestment decisions. Moreover, companies with corporate shareholders are more likely to intensify their international engagement and to retain their cross-border activities. Finally, high levels of short-term and long-term debt tend to increase the likelihood of entry into a more intense international engagement.

Keywords: Foreign markets; Entry; Exit; Exporting; FDI (search for similar items in EconPapers)
JEL-codes: C25 D21 F23 L21 (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1016/j.jebo.2012.10.016

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Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

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