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: This paper studies the relationship between international diversification and performance in agri-food firms In line with the recent literature, it analyses the effects of the degree of internationalization using a uniform sample, a long-term focus and a measure that combines export intensity and regional diversification. The study empirically confirms the hypothesis of a horizontal S-curve relationship between diversification and performance and identifies three phases. Novice export firms are found in the first stage; their profits are low because they incur in the initial costs of exporting. Mature companies with a more advanced internationalization process are in the second stage; they benefit from the positive outcomes of operating at a larger scale. Lastly, the third stage contains internationally over-diversified companies; their performance decreases as a result of costs to enter extra-regional markets, which are especially steep in this sector, and dealing with greater organisational complexity JEL Classification: F23, L66, Q13Documentos de Trabajo Facultad de Economía y Empresa Universidad de Zaragoza. 01/2015; DTECONZ(15-01).
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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; · 1.52 Impact Factor
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ABSTRACT: The theory of regionalization is still in its infancy. Previous research has shown that most firms are regional, as opposed to global in nature. This paper examines the relationship between the adoption of a regional strategy and firm performance and develops theoretical propositions. We use the main external drivers of performance i.e. market structure and insights from the adaptation/standardization approach and propose them as the main drivers that will help explain the relationship between regionalization and firm performance. Theoretical propositions are developed to further understanding of the relationship.