ABSTRACT
Studies show that firms participating in international markets tend to be more productive than those that remain domestic. Moreover, among internationalized firms, those that engage in foreign direct investment (FDI) are often more productive than those that contract with independent producers or distributors when operating abroad. However, much of this evidence exists for manufacturing firms, and these relationships have been overlooked for the hotel industry. Accordingly, this chapter proposes to start filling this gap by empirically studying if the patterns found for manufacturing firms’ globalization decisions extend to hotel firms. Using firm-level data on the Spanish hotel industry, this study documents that, on average, internationalized hotel firms are more productive than domestic ones. Moreover, firms engaging in FDI are, on average, more productive than those contracting with third parties when operating abroad. Specifically, the most productive firms tend to use ownership and management or lease and management modes; firms with average levels of productivity are likely to adopt management contracts, and the least productive firms are prone to employ franchise agreements.
