The internationalization process of firms: From exports to FDI

Using micro data for Belgium we investigate the relationship between occupational tasks changes and the rise of service trade. We focus the analysis on the extensive margin and look at the heterogeneous proliferation of firms involved in exports and imports of services across sectors characterized by different tasks changes patterns. Occupational tasks changes display an extremely consistent relationship with participation to service trade across firm groups pointing to strong churning effects. The change in analytical (interactive and routine cognitive) tasks intensity has a positive (negative) impact across the board meaning that, in industries characterized by larger changes, firms have experienced both higher (lower) likelihood of entry and exit. The negative relationship between the change in interactive tasks and service exports participation underlines the special role that proximity between demand and supply plays for services. Interestingly, we find exactly the opposite result (a positive relationship) between the extensive margin of goods exports and interactive tasks. Moreover, our analysis suggests that the change in IT use per se does not strike as being a key underlying force behind the increase in the extensive margin of service exports. AcknowledgementsThis work has been produced for the 2010 bi-annual conference of the National Bank of Belgium (NBB). The views expressed in this paper are our own and do not necessarily reflect those of the NBB. The authors thank Andrew Bernard, Gianmarco Ottaviano, and Lindsay Oldenski for providing us with helpful insights, Daniela Rohrbach-Schmidt for assistance with the BIBB data, Christian Viegelahn for help with translation from German, and Alexandra Spitz-Oener for providing the STATA classification code for tasks. We also thank seminar participants at the 2010 NBB bi-annual conference meetings, 2nd GIST conference, the RES 2011 conference and 26th EEA conference for helpful comments and suggestions. All remaining errors are ours.

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“…This could be the result of firms switching from exports to FDI, in line with the mechanism described in Conconi et al. ().…”

Section: Resultssupporting

confidence: 61%

Service Trade and Occupational Tasks: An Empirical Investigation

Ariu

Mion

2016

World Economy

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“…Improving EO-SPM relationships can help maximize the utility of standards, capacity, capabilities, collaboration and experiences (PMI, 2008), so outcomes continually meet requirements of stakeholders and markets. Uncertain BC (Conconi, Sapir and Zanardi, 2016), impacts relationships between EO, IVN, SPM and ITN. Such changes and experiences provide greater impetus for flexibility to improve competencies and NWG, managing multiple projects in different forms (Office of the Government of Commerce (OGC), 2002).…”

Section: Linking Eo and Spm In Ees Contextmentioning

confidence: 99%

“…Research in EO and INT is still in early stages, and interactions that challenge traditional INT process (McDougal, Oviatt and Shrader, 2003;Conconi, Sapir and Zanardi, 2016), provokes this research to address issues to lead to implications. Firstly, improving EO-INT relationship can be facilitated by SPM involving risk management, NWG and LNG, integrated to enhance sophistication and agility needed in choices, endeavours and outcomes.…”

Section: Implications Theoretical Implicationsmentioning

confidence: 99%

Impacts of strategic project management on ntrepreneurial orientation relationship with nternationalization

Brathwaite¹

2018

IJBED

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Firms' strategic flexibility and agility in internationalization (INT) is influenced by context. However, there are few studies concerning INT conducted in and about emerging economies (EEs). There exists a dearth of literature on INT connected to strategic management (SM). Such gaps motivate this research to alleviate needs to further explore entrepreneurial orientation (EO) of owners and managers, their motives for foreign market entry, and effects of the innovation (IVN) and networking (NWG) with firms' INT. It incorporates how strategic project management (SPM) flexibility can enable firms in EEs to be more agile in EO, influencing how they develop INT activities of exporting (EXP) and sales-subsidiary establishment (SSE), to minimize hindrances and improve performance. This is a vital attractive area of research to pursue for the importance of INT and advantages in and for EEs is increasing, and exploration reveals EO elements and enabling factors enhancing INT outcomes. The qualitative approach reviews literature in EO, INT and SPM, and presents a conceptual model with propositions, complemented by enhanced framework. Organization learning theory (OLT) perspective is utilized to better understand EO of firms in and from EEs, leading to effective INT outcomes.Findings and implications are that coordination assists EO, goal and role clarification, for SPM crucial to synergy, promotes agility, effective SM and outcomes, minimizing difficulties as IVN, NWG and learning (LNG) support drivers and mechanisms improving INT performance (Kodama, 2005;Belassi, Kondra and Tukel, 2007;Tomomitsu, Carvalho and Moraes, 2017). This paper contributes to theory and practice further developing EO-SPM-INT relationships, and focusing on SPM and IVN interactions, firms can better coordinate for more effective INT. Researchers and practitioners can benefit from the novel means to improve processes and critical managerial and success factors best integrating SO, SI and results beneficial in EEs' INT.

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“…Firms regularly pursue a gradual internationalisation process whereby they establish intermediate input sourcing channels through importing and/or sales distribution networks through exporting before becoming multinational. This sequencing can be explained by productivity enhancement from the use of imported intermediate inputs due to learning, variety and/or quality effects (Colantone & Crinò, ; Kasahara & Rodrigue, ; Kugler & Verhooven, ) and reduced market uncertainty from opening up foreign sales channels through exporting (Concini, Sapir, & Zanardi, ).…”

Section: Empirical Approachmentioning

confidence: 99%

Do Swedish multinationals pay less in taxes than domestic firms?

2017

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There has been growing concern about multinational enterprises (MNEs) increased use of taxavoidance schemes, enabling them to pay very little tax. MNEs can reduce their tax payments in several ways. For instance, they can shift revenues by overpricing inputs produced in low-tax jurisdictions (transfer pricing), or they can set up favourable internal debt structures to take advantage of differences in interest deductions and interest payments across countries. Such strategic tax-planning activities lead to lost tax revenues in countries with uncompetitive tax systems, and distorted competition vis-a-vis domestic firms that do not have the same possibilities. In response, attempts have been made for international cooperation and coordination of tax laws, strongly initiated by the G20 2012 initiative and the OECD 2013 action plan. 1 Currently, more than a hundred countries collaborate to counteract base erosion and profit shifting (BEPS) by, for example, country-bycountry reporting to mitigate transfer pricing. In addition, several countries have taken unilateral action to restrain MNE cross-border income shifting, typically by restricting interest deductions. 2 The common perception that MNEs engage in strategic tax planning is generally confirmed by research evidence (Devereux, 2006;Heckemeyer & Overesch, 2013;Hines, 1999). There is, however, considerable variation in the empirically quantified magnitudes of tax-planning activities. One challenge is the difficulty in identifying the effects of these activities. Most previous studies have estimated semi-elasticities based on corporate tax-rate differences between home and host country, typically focusing on the impact of tax-rate reductions in the host country. The problem with this method is that it entangles strategic tax planning with the effect a lower corporate tax rate may have on profitability, resulting in an upward bias in the identified profit shifting. In addition, many studies ignore the influence on tax payments of firm-level factors that are not due to strategic tax planning (such as leveraged firms benefiting from interest deductions).In this study, we address these shortcomings. Our approach allows us to detect systematic differences between multinational and domestic firms without relying on changes in corporate tax-rate 1 This action plan involves measures equipping national governments with means to prevent tax erosion and secure that profits are taxed where they are generated by economic activity. 2 For example, Belgium, Germany and Italy have adopted thin capitalisation rules limiting the leverage of multinational firms and other regulations restricting intra-company debt transfers.

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The internationalization process of firms: From exports to FDI

Cited by 148 publications

References 52 publications

Service Trade and Occupational Tasks: An Empirical Investigation

Service Trade and Occupational Tasks: An Empirical Investigation

Impacts of strategic project management on ntrepreneurial orientation relationship with nternationalization

Do Swedish multinationals pay less in taxes than domestic firms?

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