PPurpose – This paper seeks to identify factors potentially conditioning firms’ financial internationalization. Companies often internationalize their financial areas as part of their larger internationalization strategy. In other words, such an initiative is associated with the internationalization of non-financial business areas. However, the move to financial internationalization may also obey a specific strategy designed to take advantage of the opportunities offered by increasingly global financial milieus and markets. Then again, of course, it may respond to a combination of the two, in which case all the factors mentioned are likely to exercise some influence. Design/methodology/approach – To test these propositions, a sample of 461 firms located in the Basque Country (Northern Spain), were analyzed between 16 June and 13 July 2004. Primary data were collected by telephone surveys, with a specially designed questionnaire tested previously with a number of pilot businesses. The sample represents a confidence level of 95 percent and 4.25 percent as a maximum level of error. This sample was divided by company size and the sector each business worked in, maintaining, approximately, proportionality in each stratum with respect to the population. Mann-Whitney and Kruskal-Wallis tests and logit analysis were used, among others. Findings – Companies most likely to go into debt abroad are larger and more internationalized commercially and in production. First are large exporting companies with one or more production facilities abroad (PFA), which are followed by: medium enterprises that export and which have at least one PFA and large companies that export but which have no PFA. The profile of firms with foreign shareholders begins with manufacturing companies that import, followed by commercial businesses that also import. One interesting feature is the low number of companies in the construction industry and the services sector, particularly the ones that neither export nor import. Research limitations/implications – A sample of 461 firms located in the Basque Country (Northern Spain) were analyzed and thus the sample might be geographically limited. Also, the degree of financial internationalization of these firms is relatively low. A sample which covers a greater amount of financially internationalized firms, might have led to more solid conclusions. Practical implications – The most noteworthy practical implication of the paper is the confirmation that Basque firms still do not clearly perceive opportunities for financial internationalization. The barriers and risks to be faced beyond geographical borders weigh heavily. In other words, the threats companies are exposed to outweigh potential opportunities in international markets, or the conditions for financing and domestic financial investment available are in general more favourable than the conditions obtainable abroad. Originality/value – Within the Basque firms, even if the commercial, supply and production internationalization has been analyzed at length, the financial internationalization has not. Moreover, the profiles of financially internationalized firms have not been analyzed previously on the basis of a different sample.
