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</o:shapelayout></xml><![endif]--></head><body lang=DE link=blue vlink=purple><div class=WordSection1><p class=MsoPlainText><span lang=EN-US>Dear All,<o:p></o:p></span></p><p class=MsoPlainText><span lang=EN-US><o:p> </o:p></span></p><p class=MsoPlainText><span lang=EN-US>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.<o:p></o:p></span></p><p class=MsoPlainText><span lang=EN-US><o:p> </o:p></span></p><p class=MsoPlainText><span lang=EN-US>Presenter: Paola Conconi – Université Libre de Bruxelles (ECARES)<o:p></o:p></span></p><p class=MsoPlainText><span lang=EN-US><o:p> </o:p></span></p><p class=MsoNormal style='text-autospace:none'><span lang=EN-US>Title: " The Internationalization Process of Firms: from Exports to FDI" <o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span lang=EN-US>(joint work with André Sapir and Maurizio Zanardi)<o:p></o:p></span></p><p class=MsoPlainText><span lang=EN-US><o:p> </o:p></span></p><p class=MsoPlainText><span lang=EN-US>Abstract:<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span lang=EN-US><o:p> </o:p></span></p><p class=MsoNormal style='text-autospace:none'><span lang=EN-US>We examine how uncertainty affects the dynamics of firms' internationalization<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span lang=EN-US>choices. We develop a model in which firms are uncertain about their ability to earn<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span lang=EN-US>profits in a foreign market and must decide whether to serve it, and whether to do<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span lang=EN-US>so through exports or foreign direct investment (FDI). We show that uncertainty<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span lang=EN-US>can lead firms to “test" a foreign market via exports, before engaging in FDI.<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span lang=EN-US>To assess the evidence, we exploit detailed firm-level information about exports<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span lang=EN-US>and FDI activities in individual destination markets, for all companies registered<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span lang=EN-US>in Belgium over the period 1998-2008. We find that uncertainty increases the<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span lang=EN-US>likelihood that firms follow a gradual internationalization process, serving a foreign<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span lang=EN-US>market via exports before they set up foreign subsidiaries. We also show that<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span lang=EN-US>a firm's export experience plays a crucial role in its decision to start investing<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span lang=EN-US>in a foreign market, and the effect is stronger in the face of higher uncertainty.<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span lang=EN-US>Our analysis suggests that exports and FDI, although substitutes from a static<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span lang=EN-US>perspective, may be complements over time, since the knowledge acquired through<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US>export experience can lead firms to invest abroad.<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US><o:p> </o:p></span></p><p class=MsoNormal><span lang=EN-US>Regards,<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US><o:p> </o:p></span></p><p class=MsoNormal><span lang=EN-US>Prof. Dr. Johannes Pfeifer<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='font-size:10.0pt;font-family:TTdcr10'><o:p> </o:p></span></p><p class=MsoNormal><span lang=EN-US style='mso-fareast-language:DE'>--<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='mso-fareast-language:DE'>Johannes Pfeifer<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='mso-fareast-language:DE'>Department of Economics<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='mso-fareast-language:DE'>University of Tuebingen<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='mso-fareast-language:DE'>Mohlstrasse 36<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='mso-fareast-language:DE'>72074 Tuebingen<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='mso-fareast-language:DE'>Germany<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='mso-fareast-language:DE'>Phone: +49 7071 29</span><span style='mso-fareast-language:DE'>74137<o:p></o:p></span></p><p class=MsoNormal><o:p> </o:p></p></div></body></html>