The role of firm ownership on internationalization: evidence from two transition economies

This paper investigates how different types of owners influence the extent of firm internationalization, measured by the share of firm exports in total sales. The results of the analysis carried out using firm level data of Estonian and Slovenian firms, show that the firms under the control of the insider owners are, on average, more internationalized. State control, on the other hand, hampers internationalization efforts. Further, more productive firms, larger firms, more capital-intensive firms and those with high level of investment in both fixed capital and R&D are more successful in internationalization process. Finally, high market share also leads to increased internationalization through exports as firms seek to expand in foreign markets after having dominated the domestic ones.