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

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  • Paula Sarmento

    (University of Porto)

  • Rosa Forte

    (University of Porto)

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.

Suggested Citation

  • Paula Sarmento & Rosa Forte, 2019. "Does Foreign Presence Induce Host Country Firms’ Exit? The Case of Portugal," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 25(3), pages 323-337, August.
    • Handle: RePEc:kap:iaecre:v:25:y:2019:i:3:d:10.1007_s11294-019-09744-5
    DOI: 10.1007/s11294-019-09744-5
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