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The Asymmetries of a Small World: Entry Into and Withdrawal From International Markets by French Firms

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  • Engel, Dirk
  • Procher, Vivien
  • Schmidt, Christoph M.

Abstract

This paper studies the internationalization behaviour of French companies, using more than 330.000 observations for three two-year intervals. We analyze the role of productivity, organisational and ownership structure, and of financial characteristics for the decision to enter into and exit from foreign markets. High levels of productivity are documented to be characteristic of companies deciding to engage in exporting or foreign direct investment (FDI). However, there does not seem to be a significant correlation between productivity and divestment decisions. Moreover, companies with corporate shareholders are more likely to intensify their international engagement and to retain their cross-border activities. Finally, with some exceptions high levels of short-term and long-term debt tend to make entry into a more intense international engagement more and its reduction less likely.

Suggested Citation

  • Engel, Dirk & Procher, Vivien & Schmidt, Christoph M., 2010. "The Asymmetries of a Small World: Entry Into and Withdrawal From International Markets by French Firms," Ruhr Economic Papers 192, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
  • Handle: RePEc:zbw:rwirep:192
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    References listed on IDEAS

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    Cited by:

    1. Joachim Wagner, 2012. "International trade and firm performance: a survey of empirical studies since 2006," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(2), pages 235-267, June.

    More about this item

    Keywords

    Foreign markets; entry and exit; exporting; FDI;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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