Exit in globalising industries: the role of international (out)sourcing
AbstractThis paper studies the impact of globalisation on the exit behaviour of domestic and foreign firms in the manufacturing industries of Belgium, one of the most open economies in the world. The strongest effects are found to come from rising import growth and rising multinational firms penetration of the industry, which systematically increase the probability of exit of (inefficient) domestic firms. Product differentiation and international (out)sourcing moderate this impact and lower the risk of exit. Controlling for productivity differences across firms, exporting on itself does not lower the probability of exit. Subsidiaries of multinational firms are found to be subject to similar disciplinary forces from import competition as domestic firms but do not show exit to respond to the same passive learning process.
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Bibliographic InfoPaper provided by Vlerick Leuven Gent Management School in its series Vlerick Leuven Gent Management School Working Paper Series with number 2006-14.
Length: 33 pages
Date of creation: 01 Jun 2006
Date of revision:
Exit; Sourcing; International Competition;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-06-10 (All new papers)
- NEP-BEC-2006-06-10 (Business Economics)
- NEP-COM-2006-06-10 (Industrial Competition)
- NEP-CSE-2006-06-10 (Economics of Strategic Management)
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- Ch. Piette & M. Pisu, 2008. "Gross job flows and firms’ international activities," Economic Review, National Bank of Belgium, issue II, pages 39-53, June.
- Veerle Miranda & Marialuz Moreno Badia & Ilke Van Beveren, 2012.
"Globalization drives strategic product switching,"
Review of World Economics (Weltwirtschaftliches Archiv),
Springer, vol. 148(1), pages 45-72, April.
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