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Import competition and the exit of firms in belgian manufacturing

  • Coucke, Kristien

    ()

    (Vlerick Leuven Gent Management School)

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    In this paper we investigate the different effects of import competition on the exit behaviour of different types of firms. We find that import competition in Belgian manufacturing has a strong positive effect on the exit behaviour of firms that are not part of a multinational network. However, domestic firms with outsourcing activities (through a network of independent firms) experience a less important crowding out effect. Strong import competition especially increases the exit behaviour of larger domestic firms. But also multinational firms that do not specialise their production process through sourcing of less cost efficient activities abroad, have a higher probability to exit in industries characterised by strong import competition. The finding that import competition also increases the competitive pressure between multinational firms, reflects the increased importance of specialisation of production processes and vertical oriented FDI during the last decade. Note

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    Paper provided by Vlerick Leuven Gent Management School in its series Vlerick Leuven Gent Management School Working Paper Series with number 2005-14.

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    Length: 32 pages
    Date of creation: 14 Jul 2005
    Date of revision:
    Handle: RePEc:vlg:vlgwps:2005-14
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