Import Competition and the Exit of Firms in Belgian Manufacturing

33 Pages Posted: 19 Dec 2005

See all articles by Kristien Coucke

Kristien Coucke

Vlerick Business School - Entrepreneurship, Governance and Strategy

Date Written: 2005

Abstract

In this paper we investigate the different effects of import competition on the exit behaviour of different types of firms. We find that import competition in Belgian manufacturing has a strong positive effect on the exit behaviour of firms that are not part of a multinational network. However, domestic firms with outsourcing activities (through a network of independent firms) experience a less important crowding out effect. Strong import competition especially increases the exit behaviour of larger domestic firms. But also multinational firms that do not specialise their production process through sourcing of less cost efficient activities abroad, have a higher probability to exit in industries characterised by strong import competition. The finding that import competition also increases the competitive pressure between multinational firms, reflects the increased importance of specialisation of production processes and vertical oriented FDI during the last decade.

Keywords: Exit, Import, Multinational presence

Suggested Citation

Coucke, Kristien, Import Competition and the Exit of Firms in Belgian Manufacturing (2005). Available at SSRN: https://ssrn.com/abstract=870395 or http://dx.doi.org/10.2139/ssrn.870395

Kristien Coucke (Contact Author)

Vlerick Business School - Entrepreneurship, Governance and Strategy ( email )

Vlamingenstraat 83
Leuven, B-3000
Belgium
+32 16 323635 (Phone)

HOME PAGE: http://www.vlerick.be/research/db/search.cfm?menu1=764

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