Home Firm Performance after Foreign Investments and Divestitures

Arbeitspapier

Being international' has nearly become an undisputed aim for firms in a globalized world. Several papers find a positive relationship between foreign direct investment (FDI) and the home performance of firms. In this paper we address the 'FDI - export' relationship to better understand this pattern. Furthermore, by presenting first results on firm's post-divestiture employment growth at home we are able to provide a more comprehensive view on fi rm performance after stepping in and out of foreign markets. We apply a propensity score matching technique in combination with a difference-in-difference estimator to analyze the performance dynamics of French firms that invested abroad or carried out foreign divestitures during the period 2000-2007. FDI has on average a positive home firm eff ect in terms of export share, operating turnover and employment. Industry differences reveal that firms in high-tech industries experience a strong increase in their home performance, whereas firm performance in low-tech industries increases only moderately in post-investment periods. In contrast, the divestiture impact on the post-divestiture performance is rather negligible.

Object Details

• ISBN: 978-3-86788-217-0
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Ruhr Economic Papers ; No. 193

Classification and Topics

• Classification: Wirtschaft ; International Investment; Long-term Capital Movements ; Multinational Firms; International Business ; Firm Behavior: Theory ; Firm Performance: Size, Diversification, and Scope
• Subject: Foreign markets ; entry and exit ; firm performance ; Multinationales Unternehmen ; Internationale Markteintrittsstrategie ; Direktinvestition ; Desinvestition ; Außenhandelswirtschaft ; Unternehmensentwicklung ; Beschäftigungseffekt ; Marktanteil ; Umsatz ; Frankreich

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Engel, Dirk ; Procher, Vivien
• Event: Veröffentlichung
• (who): Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)
• (where): Essen
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/37018
• Last update: 10.03.2025, 11:42 AM CET