Does the regional nature of multinationals affect the multinationality and performance relationship?
ABSTRACT The traditional independent variable in the multinationality and performance literature is the ratio of foreign (F) to total (T) sales, (F/T). This can now be supplemented by a new regional variable, the ratio of regional (R) to total (T) sales, i.e. (R/T). Data are presented on both (F/T) and (R/T) for both sales and assets for a 5-year period, 2001–2005. New tests are reported on (R/T) as it affects a financial measure of performance, the Tobin’s Q. Implications are drawn for future research on the S-curve relationship between multinationality and performance in the light of this regional phenomenon.
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ABSTRACT: Drawing on regional strategy theory we complement the core effect of firm-specific advantages on the performance of multinational enterprises with an analysis of the performance consequences of home region concentration on firm performance. We also develop hypotheses regarding the effect of foreign entry timing, internationalization speed and international experience on the performance effect of home region concentration. We test our hypotheses against unique longitudinal data from a panel of 128 multinational enterprises in the retail sector whose geographical spread of international activities we traced between 1995 and 2010. Our findings support the predictions of regional strategy theory and highlight the importance of foreign entry timing and internationalization speed in strengthening the positive effect of home region concentration on the performance of multinational enterprises.British Journal of Management 01/2014; DOI:10.1111/1467-8551.12013 · 1.52 Impact Factor
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ABSTRACT: Purpose – Recently, studies call for a more nuanced perspective on different internationalization patterns pursued by early internationalizers. These studies argue that most born global firms turn out to be born regional and that the proportion of true born global firms would be overestimated. Moreover, literature claims that the proportion of born global firms increases over time due to macroeconomic trends. The purpose of this paper is to investigate these assumptions by providing a dynamic perspective on the prevalence of different types of internationalization patterns among Canadian small and medium-sized exporters (SMEs). Design/methodology/approach – To empirically examine the ideas above, the authors constructed a unique large-scale longitudinal (1997-2004) dataset. A multinomial logit model is employed to estimate a firm's predicted probability, Ceteris paribus, of choosing different internationalization patterns: born global, born regional, and gradual internationalization. Findings – It is found that born global firms indeed account for a smaller proportion than born regional firms (16 per cent vs 27 per cent). However, evidence is found that born globals and born regionals are increasingly established over time and that macroeconomic factors seem to account for this development, at least partially. Originality/value – Combining a rigorous empirical analysis with a unique large-scale longitudinal dataset, the paper addresses two fundamental research questions in the international entrepreneurship (IE) literature: which internationalization pattern prevails; and if the born global pattern is increasingly established over time. The paper therewith theoretically contributes by comparing the predictive value of different internationalization frameworks (international new venture (INV) framework, stage-models and regionalization hypothesis), toward which there is considerable current debate.International Marketing Review 05/2012; 29(5):519 – 535. DOI:10.1108/02651331211260368 · 1.18 Impact Factor
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ABSTRACT: We study an underrepresented area in the international business literature: the effect of the meta-environment on multinational enterprise (MNE) performance. A meta-environment is a symbiosis of all country environments where an MNE operates. This conceptualization of a firm's external context is important because country borders increasingly become permeable. The unique governance structure of the MNE allows to specialize in recombining and melding multiple country resources and institutions. At any given point in time, each MNE will explore and exploit its own company-specific meta-environment. We therefore argue that variations in the meta-environment determine variations in MNE performance because wherever a firm is located, whether it has one location or many, its presence in a geographic space positions it relative to others in a unique configuration. Our study is among the first to examine empirically the impact of the meta-environment on firm achievements with a unique panel dataset from European multinationals. The results provide convincing support for our approach to the study of MNE performance.International Business Review 08/2011; 20(4):454-465. DOI:10.1016/j.ibusrev.2010.08.003 · 1.51 Impact Factor