US middle-market firms reluctant to expand abroad, says survey

Nearly three-quarters (73%) of US middle-market firms that currently sell and operate solely in North America do not intend to expand beyond the region in the next three years, a survey has revealed today.

Only 7% of these “domestic” firms are currently engaged in overseas expansion, according to a report entitled 'US middle market firms and the global marketplace: Should I stay or should I go?'.

The research, sponsored by the National Center for the Middle Market - a collaboration between The Ohio State University’s Fisher College of Business and GE Capital - defines middle market firms as those with revenue between US$10m and US$1bn.

These “domestic” firms see international expansion as risky and expensive.

Some 82% say their focus on the home market is a strategic choice, and 59% say the costs of expanding abroad outweigh the benefits.

The vast majority (77%) of “international” firms - those in the survey that engage in sales or operations beyond North America, from simple exports to engaging in manufacturing in foreign countries - say that long-term growth prospects are the greatest driver of their globalisation efforts.

The Economist Intelligence Unit survey was carried out in September 2012. The 356 respondents were executives from US middle market firms. Fifteen industry sectors were represented, as were 45 states.