An Empirical Investigation into the Internationalisation Patterns of UK Firms

Abstract

We conduct a unique longitudinal analysis on the patterns of internationalization for a sample of 600 UK firms over a 23 year sample period from 1990 to 2012. We use three measures of multinationality – the classification system for firm-level multinationality of Aggarwal, Berrill, Hutson and Kearney (2011), foreign sales as a percentage of total sales and the number of geographic segments in which material sales occur as disclosed in the firm’s consolidated accounts. Our results show that multinational levels have increased over time. We find little evidence that firms are regional in their sales but equally few firms are categorised as global. We also find some evidence to support the de-internationalisation of firms. The industrial analysis shows that Health Care and Basic Materials are the most international industries, while Financials, Consumer Services and Utilities are the least multinational. We show that non-services firms are more multinational than services firms, in every year and using all three measures of internationalization.