Growth of the firm and foreign trade
Adrian Wood’s theory revisited
Abstract
This paper analyzes the growth of the firm by foreign trade. The theory of Adrian Wood is revisited for the analysis of growth and profit trade-off and improved to cope with growth by exports. The main outcome of this paper is that low domestic demand can be a very important factor to firm choices growth by foreign market. However, the growth of domestic demand does not necessarily reduce exports.
JEL Classification: D21; L11; F12.
Keywords: foreign trade firm strategy barriers to exit Adrian Wood