Crisis and Recovery

Focussing on the global trade collapse and the subsequent recovery period, this paper examines the export performance of firms that are involved in complex internationalization strategies, which are typically associated with GVC engagement. Using a random-effects probit model with panel data and a dynamic panel data, it is found that, once firm characteristics are controlled for, complex internationalization plays an important role in continuing to export and, additionally, positively influences the level of exports. Thus, firms active in a complex mix of internationalization strategies have an added advantage, which enables them to confront the uncertainty of foreign markets in better conditions and translates to a lower likelihood of ceasing exporting and to higher export values. The analysis goes one-step further and investigate whether the impact is different during the trade collapse in 2009 and the following recovery. Here previous empirical research at firm level on the role of GVCs in trade is contradictory. The present paper throws light on this question by showing that the negative impact of trade collapse in 2009 on export level was lower for GVC-involved firms and the subsequent recovery has been more intense