Foreign expansion strategy and performance
Abstract
The aim of this study is to examine the determining factors of a firm’s performance, as a direct consequence of its diversification strategy in its expansion into foreign markets, considering certain factors like the market, the product and the company itself. As a novelty, the methodology employed uses the event‐study to estimate the excess of returns generated by its shares on the Stock Market, based on a sample of 35 expansion announcements into external markets corresponding to 11 diversifying companies. A regression analysis is also carried out to examine the impact of these factors, market, product and company, on the excesses in returns observed. The empirical application, carried‐out in Spain, has allowed us to detect that, on average, the impact of the news about a company’s expansion on the returns on its shares is positive; its determining factors being the speciality of the product offered and the level of development in the target country.
Keywords
Citation
José Mas‐Ruiz, F., Luis Nicolau‐Gonzálbez, J. and Ruiz‐Moreno, F. (2002), "Foreign expansion strategy and performance", International Marketing Review, Vol. 19 No. 4, pp. 348-368. https://doi.org/10.1108/02651330210435663
Publisher
:MCB UP Ltd
Copyright © 2002, MCB UP Limited