Export experience drives firms to offshore services, boosting global market success.
Service inputs play a big role in the costs of exporting for companies. A study on French firms shows that those with more experience in exporting are more likely to get services from the same market. Companies tend to start offshoring services only after they have gained enough confidence in their export success. Offshoring within the company is preferred over external sourcing as firms gain more experience in a foreign market. Companies are more likely to offshore when there are difficulties in getting services between domestic and foreign markets. Offshoring companies tend to sell more, have stable sales, and are less likely to leave foreign markets.