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The Conquest of Foreign Markets in the Chemical Industry


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  • Benjamin Néfussi


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    A French company wanting to conquer a foreign market can either produce its product in France and export it, or produce it within the foreign market itself. Setting up locally requires heavy investment, but the cost per unit produced is lower if production takes place locally. In this context, it is often shown that the most productive companies agree to pay the high cost of setting up abroad. This result can be made more precise by distinguishing the decision to set up abroad not only by company, but also by destination. In the chemical sector, productivity only has a positive effect when the market in question is sufficiently large. In smaller markets the least productive companies are most likely to set up abroad. If countries neighbouring a particular destination provide interesting opportunities for the company, it is more likely to set up there, which confirms the platform role of foreign investment.

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    Bibliographic Info

    Article provided by Institut National de la Statistique et des Etudes Economiques in its journal Economie et Statistique.

    Volume (Year): 405-406 (2008)
    Issue (Month): (February)
    Pages: 119-140

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    Handle: RePEc:crs:ecosta:es405-406f

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    Keywords: Trade; Foreign Investments; Multinationals;

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