The consequences of DE-internationalization: Empirical evidence from Belgium

In this chapter, we explore the effect of export exit on subsequent firm performance in a sample of 13,629 Belgian small and medium-sized enterprises (SMEs). We find that firms that stop exporting have lower profitability and profitability declines even further after they exit foreign markets. Firms that were highly dependent on revenues from exports and firms exiting multiple markets are more negatively affected, as reflected in lower post-exit survival rates and profitability. However, export duration or exiting institutionally distant markets does not have a significant impact on subsequent firm performance. Finally, although firm performance is negatively affected by exit, failed internationalization does not always lead to firm failure. Theoretical and practitioner implications are discussed.