An empirical investigation into the internationalisation patterns of UK firms

Abstract

We conduct an unique longitudinal analysis on internationalisation patterns 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 , 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 evidence to support de-internationalisation in some sample years. 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. Non-services firms are more multinational than services firms.

Keywords:

• Internationalisation patterns
• regionalisation
• globalisation
• de-internationalisation
• multinational companies (MNCs)

Note

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 The relevant accounting standard for geographical segment disclosure IFRS 8 replaced IAS 14 in 2006. It does not specify a quantitative threshold for ‘material’ sales or assets, it is assumed to be between 5 and 10%. Firms must disclose a segment that accounts for over 10% of its total assets, profit or revenue.

Additional information

Notes on contributors

Jenny Berrill

Jenny Berrill is an Assistant Professor at Trinity Business School. Her research interests are in the areas of multinational companies and their role in the international diversification of portfolios. She is also interested in the regionalisation/globalisation debate, FDI and firm level performance. She has published articles in the Journal of Economics and Business, International Business Review, International Review of Financial Analysis, International Journal of Finance and Economics, Financial Analysts Journal, Thunderbird International Business Review, Journal of Emerging Market Finance and Research in International Business and Finance. She is an Associate Editor of the International Review of Financial Analysis.

Martin Hovey

Martin Hovey recently retired from his position as an Associate Professor at the University of New England, Australia.