(Not so) easy come, (still) easy go? Footloose multinationals revisited

Arbeitspapier

This paper revisits the "footloose" nature of multinational firms (MNFs) hypothesis. Using firm-level data for Belgium over the period 1997-2008, we rely on a Probit model and take into account the endogeneity of the determinants of firm exit. Our results may be summarised as follows. First, the unconditional exit probability of MNFs is lower than that of domestic firms. Second, controlling for firm and sector characteristics - firm age, Total Factor Productivity, sunk costs, size, competition on the product market, sector-level value added growth, and sector dummies - the difference between the exit probability of MNFs and domestic firms becomes positive. Third, our results show that MNFs have a lower sensitivity to sunk costs and size than do domestic firms, which may be interpreted as lower exit barriers due to greater possibilities of relocating tangible and intangible assets to foreign affiliates.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: NBB Working Paper ; No. 223

Classification and Topics

• Classification: Wirtschaft ; Firm Behavior: Empirical Analysis ; Multinational Firms; International Business
• Subject: firm exit ; multinationals ; Total Factor Productivity ; sunk costs ; panel data ; Probit model ; Multinationales Unternehmen ; Produktivität ; Liquidation ; Sunk Costs ; Probit-Modell ; Belgien

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Blanchard, Pierre ; Dhyne, Emmanuel ; Fuss, Catherine ; Mathieu, Claude
• Event: Veröffentlichung
• (who): National Bank of Belgium
• (where): Brussels
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/144435
• Last update: 10.03.2025, 11:45 AM CET