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Internationalisation modes of European firms
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Beked-Gabor2_2012.pdf
Adobe PDF, 336.11 KB
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https://hdl.handle.net/20.500.14018/27450
Abstract
This paper analyzes internationalization mode choices of European firms. Using survey data on three European countries, France, Italy and Spain, we find few differences between indirect exporters and non-exporters, while direct exporters and FDI conducting firms are significantly larger and more productive than non-exporters. Also, just about 3 percent of all firms or 5.5 percent of exporters exported only indirectly through domestic intermediaries. With a simple calibration of an international trade model in which heterogeneous firms choose between indirect exporting, direct exporting and FDI, we show that this pattern is in line with large fixed costs of direct exporting and FDI while the cost structure of indirect trade should consist either relatively large fixed or marginal cost. These observations suggest that sorting based on productivity do not describe well indirect traders. Furthermore, we find that features of firms and products such as innovative content will affect the trade mode choice- in line with theories of emphasizing contractual frictions.
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2012