Regional strategies, liability of foreignness, and firm performance

Abstract

Purpose

This paper seeks to analyze the performance implications of the regional and global strategies pursued by multinational companies. It aims to argue that a firm could experience different performance effects for its intra‐ and inter‐regional operations due to differences in the liability of foreignness between these two levels.

Design/methodology/approach

Using a large sample of multinational enterprises (MNEs) drawn from all triad regions during the period 1998‐2008, the paper uses panel data methods to analyze the relationships in the sample.

Findings

The paper finds significant support for the difference in the effects of intra‐ and inter‐regional operations on performance between firms that operate within their home region and those that venture outside it.

Originality/value

This is one of the first papers to examine an impact of regional sales dispersion on MNEs' performance. An exclusion of home country sales from the home region sales is a novel feature of this research.

Citation

Kudina, A. (2012), "Regional strategies, liability of foreignness, and firm performance", Multinational Business Review, Vol. 20 No. 4, pp. 331-351. https://doi.org/10.1108/15253831211286255