In this paper, we investigate empirically how firms' choices of globalization mode differ according to their productivity and Tobin's q using firm-level data of Japanese firms. Our findings support predictions by Helpman, Melitz, and Yeaple (2004) and by Chen, Horstmann, and Markusen (2008)....

Recent heterogeneous-firm models of international trade suggest that productivity determines whether firms engage in export and foreign direct investment. However in practice, m Abstract any productive firms are not internationalized, whereas many unproductive firms are. This situation suggests...