Export orientation, foreign affiliates, and the growth of Austrian manufacturing firms

Using data on Austrian manufacturing firms, this paper analyzes the impact of the propensity to export and the existence of foreign affiliates on the growth performance of firms at their domestic location. Dynamic panel regressions do not suggest that foreign affiliate activity exerts negative effects on the expansion of domestic activities. In contrast, successful firms in the possession of intangible firm specific assets are able to compete successfully and grow both at home and abroad. Foreign affiliate activity seems to preserve and even reinforce a firm's growth potential at its domestic location. (C) 2004 Elsevier B.V. All rights reserved.