Internationalization and Size, Age and Profitability in the United Kingdom

Abstract

Many factors contribute to a firm's level of exportactivity. This study focuses on the impact of firm size, age, and profitabilityon export activity. The data, obtained from the Financial Analyses Made Easy(FAME) database and compiled for 1999 on firms of all sizes and ages,weredisaggregated to account for sector factors that may impact on therelationships being studied. To disaggregate the data, ordinary least squaresregression, logit regressions, and arithmetic means of exporters andnon-exporters were utilized. Sections of the paper examine the impact of firm size, age, andprofitability on the export ratio and the export propensity offirms.Following the data analyses, the findings indicate that firm sizeis strongly correlated to export propensity.Older firms are more likelyto participate in international business endeavors.Although nosignificant relationship exists between profitability and sales ratio, a strongnegative link exists between export propensity and profitability. (AKP)

Keywords: FAME (Financial Analysis Made Easy) database, Earnings, International expansion, Exports & imports, International firms, Firm age, Firm size, Firm performance