Does Foreign Presence Induce Host Country Firms’ Exit? The Case of Portugal

Paula Sarmento () and Rosa Forte
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Paula Sarmento: University of Porto

International Advances in Economic Research, 2019, vol. 25, issue 3, No 6, 323-337

Abstract: Abstract This paper analyzes the impact of foreign presence on the probability of exit of host country firms, based on a significant sample of Portuguese companies from manufacturing and services over the period 2008–2012. The estimation results of a probit model strongly indicate that foreign presence at the industry level increases a host country firm’s probability of exit from manufacturing sectors. We also conclude that firms with foreign ownership have a lower probability of exit than purely domestic firms. Additionally, empirical findings also confirm that a firm’s probability of exit is influenced by the firm’s characteristics such as age, productivity and debt structure.

Keywords: Multinational firms; Exit; Portugal; F14; F23; C11 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:kap:iaecre:v:25:y:2019:i:3:d:10.1007_s11294-019-09744-5

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DOI: 10.1007/s11294-019-09744-5

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