Pressured by globalizing economies and growing international competition, an increasing number of firms are forced to rationalize productive operations. Especially poorly performing firms need to improve their profitability through downsizing or relocating their operations, which in many cases...

In this chapter, we explore the effect of export exit on subsequent firm performance in a sample of 13,629 Belgian small and medium-sized enterprises (SMEs). We find that firms that stop exporting have lower profitability and profitability declines even further after they exit foreign markets....