[Econmaster2012] Research Seminar in Economics-Announcement

[Johannes Pfeifer]

Dear All,

 

we are happy to announce the following  Research Seminar in Economics to
take place on Tuesday, November 27th  at  18:00 - 19:30 in room E03, ground
floor, Mohlstraße 36.

 

Presenter:  Paola Conconi – Université Libre de Bruxelles (ECARES)

 

Title:  " The Internationalization Process of Firms: from Exports to FDI" 

(joint work with André Sapir and Maurizio Zanardi)

 

Abstract:

 

We examine how uncertainty affects the dynamics of firms'
internationalization

choices. We develop a model in which firms are uncertain about their ability
to earn

profits in a foreign market and must decide whether to serve it, and whether
to do

so through exports or foreign direct investment (FDI). We show that
uncertainty

can lead firms to “test" a foreign market via exports, before engaging in
FDI.

To assess the evidence, we exploit detailed firm-level information about
exports

and FDI activities in individual destination markets, for all companies
registered

in Belgium over the period 1998-2008. We find that uncertainty increases the

likelihood that firms follow a gradual internationalization process, serving
a foreign

market via exports before they set up foreign subsidiaries. We also show
that

a firm's export experience plays a crucial role in its decision to start
investing

in a foreign market, and the effect is stronger in the face of higher
uncertainty.

Our analysis suggests that exports and FDI, although substitutes from a
static

perspective, may be complements over time, since the knowledge acquired
through

export experience can lead firms to invest abroad.

 

Regards,

 

Prof. Dr. Johannes Pfeifer

 

--

Johannes Pfeifer

Department of Economics

University of Tuebingen

Mohlstrasse 36

72074 Tuebingen

Germany

Phone: +49 7071 2974137

 

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