Performance Following Changes of International Presence in Domestic and Transition Industries

We examine relationships between firm performance and changes in international presence in five medical sector industries between 1978 and 1989, conditioned on the international status of the industries and the market position of the firms. International expansion was necessary for survival when foreign firms began to enter a domestic market, but only firms with substantial market share and international experience, gained prior to the industry transition, could expand successfully. Operating only in the home market may permit a firm to survive in a primarily domestic industry, but moderate international expansion often brings current benefits and provides a base for future success should the industry become more global. However, expansion carries the risk of failure: firms that retrench after expanding internationally disappear.