Internationalization Strategies of Multi-Product Firms: The Role of Technology

32 Pages Posted: 13 Aug 2020

See all articles by Daniel Baumgarten

Daniel Baumgarten

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics

Michael Irlacher

Johannes Kepler University

Karin Mayr-Dorn

Johannes Kepler University of Linz

Date Written: 2020

Abstract

High-performance firms typically have two features in common: i) they produce in more than one country and ii) they produce more than one product. In this paper, we analyze the internationalization strategies of multi-product firms at the product-level. We find that the most productive firms sell core varieties via foreign direct investment (FDI) and export products with intermediate productivity. Shocks to trade costs and technology affect the endogenous decision to export or produce abroad at the product-level and, in turn, the relative productivity between parents and affiliates.

Keywords: multi-product firms, FDI, exports, flexible manufacturing

JEL Classification: F120, F230, L250, L110

Suggested Citation

Baumgarten, Daniel and Irlacher, Michael and Mayr-Dorn, Karin, Internationalization Strategies of Multi-Product Firms: The Role of Technology (2020). CESifo Working Paper No. 8471, Available at SSRN: https://ssrn.com/abstract=3671257

Daniel Baumgarten (Contact Author)

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics ( email )

Ludwigstrasse 28
Munich, D-80539
Germany

Michael Irlacher

Johannes Kepler University ( email )

Linz
Austria

Karin Mayr-Dorn

Johannes Kepler University of Linz ( email )

Altenbergerstrasse 69
Linz, Upper Austria 4040
Austria

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