Internationalisation favourable for business survival

06/12/2012 15:00

Foreign-controlled enterprises in the Netherlands have a higher rate of survival than enterprises under Dutch control. The survival rate of new Dutch businesses is greater if they immediately start trading with foreign partners.

Foreign companies more likely to survive

In 2011, 56 percent of Dutch companies that started in 2007 were still in business. For foreign companies in the Netherlands this was 62 percent. According to the Internationalisation Monitor 2012, the higher survival rate of foreign companies is connected with - among other things -the fact that they start business on a larger scale, and can also fall back on the capital of the parent company if necessary.

Survival rate of companies starting business in 2007

Survival rate of companies starting business in 2007

Imports and exports increase chance of survival

Dutch-controlled companies that started international trade in the year they started business have a higher chance of survival than companies who do not trade internationally.   Five years later, 71 percent of Dutch companies set up in 2007 whose activities in their first year included imports and exports were still in business. For companies which were not active in imports and exports, 55 percent were still in business.

Survival rate of Dutch companies set up in 2007

Survival rate of Dutch companies set up in 2007

Imports and exports straight from the start

Only 4 percent of companies that started business in 2007 included imports and exports activities direct from the start. The barriers for export activities are higher than those for importing products: to export successfully you have to have a foreign market.
Following a slight dip during the low point of the crisis in 2009, the share of companies that were active in international trade right from the start recovered in 2010. Eleven percent of companies which do not start out as exporters start exporting one year after their foundation.

Shares of importers and exporters when companies start

Shares of importers and exporters when companies start

Ralph Wijnen and Noortje Pouwels-Urlings

Source: Internationalisation Monitor 2012