Internationalization choices: an ordered probit analysis at industry level

This paper extends a highly influential contribution by Helpman et al. (Am Econ Rev 94: 300–316, 2004), on the link between within-industry heterogeneity, exports and foreign direct investment (FDI), by examining the robustness of their results using a more comprehensive dataset and relaxing the assumptions regarding the distribution of firm sales. The results of an ordered probit model—estimated on exports and mergers and acquisitions data for a sample of 25 origin countries, 91 destination countries and 57 manufacturing industries, over the period 1994–2004—confirm that sectors characterized by larger firms and more dispersed firm sales show higher probability of internationalization, through both exports and FDI.