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The Asymmetries of a Small World: Entry Into and Withdrawal From International Markets by French Firms

Dirk Engel, Vivien Procher () and Christoph Schmidt

No 192, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: This paper studies the internationalization behaviour of French companies, using more than 330.000 observations for three two-year intervals. We analyze the role of productivity, organisational and ownership structure, and of financial characteristics for the decision to 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, with some exceptions high levels of short-term and long-term debt tend to make entry into a more intense international engagement more and its reduction less likely.

Keywords: Foreign markets; entry and exit; exporting; FDI (search for similar items in EconPapers)
JEL-codes: C25 D21 F23 L21 (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:192

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