Home Firm Performance after Foreign Investments and Divestitures

‘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.Foreign markets; entry and exit; firm performance

Agglomeration Effects and the Location of Foreign Direct Investment – Evidence from French First-time Movers

This paper analyzes the location choice determinants of French first-time investments in Europe, North America and North Africa. Firm locations are examined on two geographical scales, the national and regional level. The final sample comprises 307 location decisions in 27 countries and across 45 regions. Both, location- and firm-specific variables are used for analysing the investment strategy of French firms. The results show that higher market demand and cultural proximity to France increase the likelihood of a particular location to be chosen, whereas higher labour cost and a larger distance between a foreign location and the headquarters deter FDI investments. Manufacturing and older companies are more likely to establish their first subsidiary in Eastern Europe. Furthermore, this study examines the extent to which French investors choose foreign locations that already host a significant number of French firms.The results obtained from regressions with various absolute and relative agglomeration measures suggest that French investors are rather attracted by firm cluster in general, or by the unobserved factors that led to the agglomeration in the first place, than by any nation-specific firm cluster.Foreign direct investment, location choices, agglomeration, smalland medium-sized enterprises

Export, FDI and Productivity – Evidence for French Firms

The decision of companies to enter international markets, either via exports or foreign direct investment (FDI), has been postulated by the self-sorting model of Helpman, Melitz and Yeaple (HMY, 2004). In the strict sense, the theoretical predictions of HMY only apply to firms that become engaged in marketdriven (horizontal) FDI. Hence, in this paper we apply more precise methodologies to test the HMY hypothesis. First, we classify MNEs according to the underlying motives for investing abroad (market-driven vs. resource-driven FDI). Second, we highlight the role of productivity growth in the post-entry period.Our findings suggest that productivity affects the FDI decision considerably whereas expected feedback and learning effects of FDI on productivity are remarkably lower.We further detect that more market-driven MNEs exhibit a higher productivity than comparatively less market-driven MNEs.Foreign direct investment, horizontal and vertical FDI, multinational enterprises, productivity

Export, FDI and firm productivity

Many empirical papers tested the theoretical predictions of Helpman, Melitz and Yeaple (HMY, 2004) which sorts firms at different internationalization states according to their productivity levels. While these papers ignore the fact, that the theoretical predictions of HMY only apply to firms that become engaged in market-driven Foreign Direct Investment (FDI), we apply a more precise methodology using a French firm sample with more than 110 000 observations. Our results show that firms with a broader investment strategy, reflecting a great importance of market-driven motives, show higher productivity levels than firms with less encompassing foreign investment strategies. We conclude that the methodology is well-suited to sort firms according to the importance of market-driven FDI

Who Does the Shopping? German time-use evidence, 1996-2009

The labor force participation rate of women and men in industrialized countries is converging, but disparities in participation in unpaid activities nevertheless remain. Shopping for household maintenance is a time-consuming out-of-home activity that continues to be undertaken primarily by women, regardless of their employment status. The present study uses panel methods to analyze, descriptively and econometrically, gender disparities in shopping behavior of couples through the use of data from the German Mobility Panel for 1996 to 2009. Although women were still found to shop more than men, the evidence indicated that the differential narrowed in recent years, particularly in couples with children. Several individual and household characteristics were found to be significant determinants of shopping behavior, whereby employment status and children emerged to be the most important single factors. In addition, the possession of a driver's license, coupled with unrestricted car availability, increased the amount of time that each partner spent shopping

Heterogeneity in the Correlates of Motorized and Non-motorized Travel in Germany: The Intervening Role of Gender

Drawing on individual-level mobility data from Germany between 1996 and 2009, this analysis econometrically investigates the determinants of automobile, public transit, and nonmotorized travel. The paper explores whether gender plays a role in determining the relative use of motorized and nonmotorized modes and, if so, how this role is mitigated or exacerbated by other socioeconomic attributes of the individual and the household. The results indicate that women display a relatively higher use of public transit and nonmotorized modes coupled with a lower use of the car. However, it is important to qualify conclusions on the effect of gender, given the range of confounding factors that mediate its impact, including age, the presence of children, the proximity to public transit, and the commute distance. The econometric estimates indicate that fare pricing and infrastructure provision have a significant influence on how individuals reach mode allocation decisions and that women, in particular, stand to benefit from the maintenance of an efficient and dense public transportation network

Foreign Market Entry and Exit: Performance Dynamics of French Firms

'Being international' has nearly become an undisputed aim for firms in a globalized world. Often, however, we do not know much about the actual performance consequences of firms' foreign market entries as well as exits. We apply a propensity score matching technique in combination with a difference-in-difference estimator to analyse the performance dynamics of French firms that have entered and left international markets during the period 2000-2007. Market entry has on average a positive home market effect in terms of productivity and turnover, whereas employment is hardly affected. Former exporters becoming engaged in FDI experience a strong export growth, indicating that FDI is rather complementing than substituting export activities. Overall, market exit has only limited effects on domestic performance, but industry differences reveal that low-tech firms are confronted with a remarkable decrease in labour productivity

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

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.Der Artikel untersucht das Internationalisierungsverhalten französischer Firmen mit Hinblick auf den Einfluss von Produktivität, Eigentümer- und Kapitalstruktur auf die Markteintritts- und Marktaustrittsentscheidungen im Ausland. Firmen, die in Märkte eintreten, entweder über Exporte oder ausländische Direktinvestitionen, weisen schon im Vorfeld ein höheres Produktivitätsniveau auf. Im Gegensatz dazu gibt es keine Hinweise auf eine Korrelation zwischen Firmenproduktivität und Marktaustrittsentscheidungen. Mit Bezug auf die Eigentümerstruktur entscheiden sich insbesondere französische Firmen mit strategischen Investoren in ausländische Märkte einzutreten und diese längerfristig zu bedienen. Im Allgemeinen scheint ein höheres Schuldenniveau zu einem erhöhten Markteintritt und verminderten Marktaustritt zu frühen

Who does the shopping? German time-use evidence

Abstract The labor force participation rate of women and men is converging in industrialized countries, but disparities nevertheless remain with respect to unpaid activities. Shopping for household maintenance, in particular, is a time-consuming, out-of-home activity that continues to be undertaken primarily by women, irrespective of their employment status. The present study employs panel methods to analyze, descriptively and econometrically, gender disparities in shopping behavior among couples using data from the German Mobility Panel (MOP) for 1996 to 2009. While women still shop more than men, we find evidence that the differential has narrowed in recent years, particularly among couples with children. Several individual and household characteristics are found to be significant determinants of shopping behavior, whereby employment status and children emerge as the most important single factors. In addition, the possession of a driver's license coupled with unrestricted car availability increase each partner's time in shopping. JEL-Classification: D13, J1