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Failure processes of exporting firms: evidence from France

Oliver Lukason (School of Economics and Business, University of Tartu, Tartu, Estonia)
Tiia Vissak (School of Economics and Business, University of Tartu, Tartu, Estonia)

Review of International Business and Strategy

ISSN: 2059-6014

Article publication date: 4 September 2017

Abstract

Purpose

This paper aims to detect failure processes of French exporting firms and study their contingency with export processes.

Design/methodology/approach

The sample consisted of 131 bankrupted exporting firms from Bureau van Dijk’s Amadeus database. Factor and cluster analyses of six financial variables from Laitinen’s (1991) model were used to detect failure processes. Export processes were detected with cluster analysis of export share in total turnover. Contingency between failure and export processes was studied with a statistical test.

Findings

Three different failure processes existed for exporting firms. Two of these processes, which accounted for 79 per cent of firms, were classified as gradual failure: a step-by-step worsening of financial performance before the bankruptcy was declared. One was a symbiotic process reflecting varying pre-bankruptcy behaviours of different financial variables. Two different types of exporters existed. Most firms (77 per cent) were occasional exporters, while 23 per cent were constantly and more strongly involved in international markets before their bankruptcy was declared. There was no contingency between failure and export processes.

Originality/value

This study is the first one to detect failure processes specifically for exporting firms based on financial variables. In line with previous literature about non-exporting firms, gradual failure processes were most characteristic to exporting firms. The study shows that different types of exporters were not characterized by any unique behaviour of financial variables before their bankruptcy was declared.

Keywords

Acknowledgements

This work was supported by the Institutional Research Funding IUT20-49 of the Estonian Ministry of Education and Research and by the Estonian Research Council's grant PUT 1003.

Citation

Lukason, O. and Vissak, T. (2017), "Failure processes of exporting firms: evidence from France", Review of International Business and Strategy, Vol. 27 No. 3, pp. 322-334. https://doi.org/10.1108/RIBS-03-2017-0020

Publisher

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Emerald Publishing Limited

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