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The Impact of Internationalised Production on the Domestic Growth of Firms

  • Michael Pfaffermayr

    (WIFO)

Based on data from the WIFO Investment Surveys, this paper analyses the relationship between a firm's foreign production and its growth at its domestic location. Firms with a high share of foreign production are more export-oriented than the average company. They have achieved a critical minimum size and are mainly active in technology-intensive industries. Internationalised firms tend to rely on a strategy which is built on both exports and foreign production. The econometric analysis confirms that larger firms on average grow more slowly but that internationalised firms, despite their above-average size, maintain and sometimes even expand their growth potential at home.

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Article provided by WIFO in its journal Quarterly.

Volume (Year): 5 (2000)
Issue (Month): 1 (February)
Pages: 25-33

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Handle: RePEc:wfo:wquart:y:2000:i:1:p:25-33
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  1. Hausman, Jerry A. & Taylor, William E., 1981. "Panel data and unobservable individual effects," Journal of Econometrics, Elsevier, vol. 16(1), pages 155-155, May.
  2. P. Geroski, 1998. "An Applied Econometrician's View of Large Company Performance," Review of Industrial Organization, Springer, vol. 13(3), pages 271-294, June.
  3. Buckley, Peter J & Casson, Mark, 1981. "The Optimal Timing of a Foreign Direct Investment," Economic Journal, Royal Economic Society, vol. 91(361), pages 75-87, March.
  4. Cabral, Luis, 1995. "Sunk Costs, Firm Size and Firm Growth," Journal of Industrial Economics, Wiley Blackwell, vol. 43(2), pages 161-72, June.
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