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

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  • Engel, Dirk
  • Procher, Vivien
  • Schmidt, Christoph M.
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.

Suggested Citation

  • Engel, Dirk & Procher, Vivien & Schmidt, Christoph M., 2013. "Does firm heterogeneity affect foreign market entry and exit symmetrically? Empirical evidence for French firms," Journal of Economic Behavior & Organization, Elsevier, vol. 85(C), pages 35-47.
    • Handle: RePEc:eee:jeborg:v:85:y:2013:i:c:p:35-47
    DOI: 10.1016/j.jebo.2012.10.016
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    5. Luíza Neves Marques Fonseca & Angela Rocha, 2023. "Setbacks, interruptions and turnarounds in the internationalization process: a bibliometric and literature review of de-internationalization," Management Review Quarterly, Springer, vol. 73(3), pages 1351-1384, September.
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    7. Alfred A. Haug & Anh T. N. Nguyen & P. Dorian Owen, 2023. "Do the determinants of foreign direct investment have a reverse and symmetric impact on foreign direct divestment?," Empirical Economics, Springer, vol. 64(2), pages 659-680, February.
    8. Steinberg, Philip J. & Procher, Vivien D. & Urbig, Diemo, 2017. "Too much or too little of R&D offshoring: The impact of captive offshoring and contract offshoring on innovation performance," Research Policy, Elsevier, vol. 46(10), pages 1810-1823.
    9. William Connell & Emmanuel Dhyne & Hylke Vandenbussche, 2019. "Learning about demand abroad from wholesalers: a B2B analysis," Working Paper Research 377, National Bank of Belgium.
    10. Michael Moritz & Veronika Hecht & Patricia Noska & Johannes Schaffler, 2020. "Types of FDI and Determinants of Affiliate Size: the Classification Makes the Difference," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 70(4), pages 312-331, October.
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    18. Procher, Vivien D. & Engel, Dirk, 2018. "The investment-divestment relationship: Resource shifts and intersubsidiary competition within MNEs," International Business Review, Elsevier, vol. 27(3), pages 528-542.
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    More about this item

    Keywords

    Foreign markets; Entry; Exit; Exporting; FDI;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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