Internationalization and Firm Performance: Case of Manufacturing Enterprises in Ecuador

Abstract

This paper aims to investigate the impact of internationalization on manufacturing enterprise performance in Ecuador. Using a panel data of 90 enterprises in Ecuador over the year 2003, 2006, 2010, and 2017 collected by the Worldbank Enterprises Survey project, with the Random Effects Model (REM) and the Fixed Effects Model (FEM), the regression result shows that the degree of internationalization (DOI) has a non-linear impact on firm performance under the inverse S-shaped curve. Besides that, the factors related to the business environment, such as bribery, access to finance, and skilled laborers' barriers, also negatively impact these firms' performance. The study's implication provides not only for firms but also for policymakers to support Ecuador businesses in the process of internationalization.