FAMO I: Internationalisation and Choice of Market Entry Vehicle. Determinants and Differences Between Firms from Vienna and from the Region Bratislava–Trnava

The CENTROPE region covers areas of the EU 15 and the new EU countries and allows businesses to use the competitive advantage of both economic areas as a result of their geographical proximity. Based on microdata, this study highlights internationalisation activities on both sides of this economic fault line (at the locations Vienna and Bratislava–Trnava) on target markets in Central and Eastern Europe. Although activities on international markets are fundamentally possible in both regions, twice as many businesses in Vienna generate turnover abroad. The size of the business and the (geographical as well as psychological) proximity to the target market are decisive factors in the level of international engagement. A large share of immigrants brings with it stronger foreign activities in these countries. Producers of goods are more likely to be active in foreign markets than service providers. Although there are enormous differences between the branches of the individual sectors. Differences in the tendency towards internationalisation between businesses in Vienna and those in Bratislava–Trnava are mostly due to differences in behaviour (business strategy) and not really due to any business characteristics. The decision to export and the likelihood of businesses in Vienna to open a branch in the target country is co-determined by the size of the business and its proximity to the target market. On the other hand contractual or other forms of co-operation take place independently of these factors.