To read this content please select one of the options below:

How do resources and diversification strategy explain the performance consequences of internationalization?

Yan Chen (School of Economics and Management, Beijing University of Posts and Telecommunications, Beijing, China)
Yiwei Jiang (School of Economics and Management, Beijing University of Posts and Telecommunications, Beijing, China)
Chengqi Wang (Business School, Yunnan University of Finance & Economics, Kunming, China and Nottingham University Business School, University of Nottingham, Nottingham, UK)
Wen Chung Hsu (Department of International Business Studies, National Chi Nan University, Puli Nantou, Taiwan)

Management Decision

ISSN: 0025-1747

Article publication date: 10 June 2014

2789

Abstract

Purpose

The purpose of this paper is to examine how firm resources and diversification strategy explain the performance consequences of internationalization of emerging market enterprises.

Design/methodology/approach

The paper conducts a regression analysis by using a novel panel data set comprising of 685 listed Chinese firms over the period of 2008-2011.

Findings

The results show that the relationship between internationalization and performance is inverse U-shaped. Further, marketing resources play a greater role in enhancing the performance effects of internationalization than technological resources do. Related product diversification enhances the performance effects, while unrelated product diversification does the contrary.

Research limitations/implications

The study focusses on listed firms in one country, and as a result, the findings cannot be generalized to non-listed firms and firms in other countries.

Practical implications

This paper offers guidelines for international managers to improve performance of internationalization by developing a particular type of resources and diversification strategy.

Originality/value

This paper extends the literature on the functional form of the internationalization-performance relationship, and further suggests that the analysis of the performance consequences of internationalization should go beyond the nexus between internationalization and performance, and focusses on firm-specific resources and strategies that may facilitate or constrain the performance effects of internationalization.

Keywords

Acknowledgements

Yan Chen thanks for financial support from National Natural Science Foundation of China (71273035), Ministry of Education, Humanities and Social Science Fund Project (10YJC790028), and Beijing Natural Science Foundation (No.: 9122019) that enables him to collect data, to travel and discuss the research between co-authors. Chengqi Wang acknowledges financial support from the British Academy (SG-090409) and Natural Science Foundation of China (No.: 71373241) which enable him to travel and visit co-authors.

Citation

Chen, Y., Jiang, Y., Wang, C. and Chung Hsu, W. (2014), "How do resources and diversification strategy explain the performance consequences of internationalization?", Management Decision, Vol. 52 No. 5, pp. 897-915. https://doi.org/10.1108/MD-10-2013-0527

Publisher

:

Emerald Group Publishing Limited

Copyright © 2014, Emerald Group Publishing Limited

Related articles