squared HHI, and HHI and its squared term both have a positive and negative sign in all equations with squared HHI, respectively. The findings imply that the relationship is of an inverted-U shape between HHI and firm's foreign sales ratio.

Market mobility, not in line with expectation, has all a negative and significant effect, regardless of its types. The results suggest that with fierce domestic competition, firms tend to concentrate more on domestic activities. As for mergers and cartels, while merger dummy has no definite effect, cartel dummy is negative and significant in some equations in the subsamples.

Export intensity and the intra-industry trade ratio have both a significant and positive effect, similar to the results of world export share analysis. However, other industry factors have no effect.

Next, concerning firm factors, firm growth, firm size, and R&D intensity, in accordance with expectations, have a positive significant effect. But, managerial intensity has a positive sign, but is not significant. This result is not amenable to sufficiently obvious explanation, but may reflect that the managerial intensity picks up largely the activities in domestic markets, not in foreign markets. Thus, we have not found robust and consistent results in the effects of competition factors on relative foreign operations. But, the results are a fact finding from Japanese industries, which would reflect Japan-specific relationships.

These results may be attributable to the following methodological problems as well. First, the variables used in the analyses may suffer from the lack of adequate measurement of competitiveness or internationalization. For example, they do not pick up competitive potential and financial performance from internationalization. It is necessary to complementarily examine the dimensions of the potential and performance. Also, it is necessary, as we emphasized earlier, to more explicitly include overseas production.

Second, the intensity of competition should be measured by alternative indicators because these used indicators do not always capture the intensity. Also, international competition and market structure are amongst the determinants of internationalization. Consequently, it is necessary to introduce direct measures, such as world market share and concentration.

Third, internationalization may inversely have an influence on mobility in domestic markets. Therefore, such endogenous relationship also should be examined in a simultaneous system.

Finally, the estimated results vary depending on samples, suggesting that estimation is sensitive to heterogeneity of sampled industries. As indicated above, international competitiveness or internationalization of firms are likely to be affected by various factors other than the variables used here. For example, in recent manufacturing, a greater role of business model is assigned to the so-called “servicization,” that is, the service component of products based on the value for consumers. The trend may have an influence on international competition and competitiveness. To control for heterogeneity among firms and industries, other industry-specific effects should be taken.