Firms' internationalization and productivity growth

From a theoretical perspective it is well stated that firms involved in international markets should exhibit higher productivity levels. There is also empirical evidence that supports this result. This paper extends this relationship to a dynamic perspective. It provides evidence on how productivity evolves in more internationalized firms distinguishing different degrees of international involvement both in qualitative as well as in quantitative terms. The results show that productivity evolves differently in those firms that are doing international business, although without differences between large exporters and multinationals.

► This paper analyses the productivity evolution of firms according to their international activities.
► Exporters have been specifically considered, since the Uppsala model stresses their qualitative difference.
► Results show that internationalized firms are not only more productive than domestic firms, but also increase their productivity at a higher pace than their counterparts.
► Results also show that the path is not different for exporters than for multinationals.