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In this paper, I address issues concerning the empirical estimation of a relationship between firm performance and its degree of multinationality. I argue for greater delineation of the underlying nature of firms’ multinationality and point to several statistical issues regarding estimation that appear to need resolution, but which appear to have been largely neglected in the literature that has examined for a multinationality–performance relationship. Among these are endogeneity of the multinationality construct in the performance relationship and the likelihood that the multinationality–performance relationship is heterogeneous across firms.

This paper aims to develop an integrated perspective on the relationship between multinationality and performance in the outward foreign direct investment (OFDI) of Chinese firms. The study not only represents contrasting OFDI patterns – namely, born global-natured multiple synchronous foreign investments versus conventional internationalization process (IP)-natured steady increasing foreign investments – but also contributes to understanding the extent to which explanations of home political influence need to be rooted within the general theory of multinationality.

By testing a comprehensive panel observation of 8,635 OFDI projects from 1991-2016 in China, this study found that multinationality with the new pattern of multiple synchronous OFDIs has a superior performance effect compared with the conventional pattern of steady increasing OFDIs.

This study also finds a positive relationship between multinationality (international diversification and home political influence) and the performance effect with the new pattern of multiple synchronous OFDIs, as well as a partial positive relationship between multinationality and the performance effect with the conventional pattern of steady increasing OFDIs.

The study extends the understanding of the performance effects of Chinese multinational enterprises, which may benefit more from the new pattern of multiple synchronous OFDIs than from the conventional pattern of steady increasing OFDIs when the home-country institution is strongly positioned.

This paper concludes that multinationality needs an integrated framework that accounts for the new pattern of OFDI and the influence of diversification and home politics, particularly for the emerging country, China.

Real options theory posits that multinationality provides additional operating flexibility and helps firms reduce downside risk. This study aims to explore the effects of chief executive officer (CEO) characteristics on the downside risk implication of multinationality in Chinese multinational corporations (MNCs).

This study gathers a sample of Chinese MNCs from 2009 to 2020 and deploys a Tobit panel estimation model with fixed effects in the empirical analysis.

This study finds that multinationality has a significant negative effect on downside risk. The downside risk reduction effect of multinationality is stronger in firms led by older CEOs, women CEOs, CEOs with overseas experience or broader functional backgrounds or those with higher educational levels. Additionally, the above effects of CEO characteristics on the downside risk reduction effect of multinationality are more pronounced in firms with smaller top management team (TMT) sizes. Hence, the findings show that the multinational network constructed by Chinese MNCs could offer great operating flexibility, and CEO characteristics and the CEO–TMT interface play an important role in achieving real options flexibility from multinationality.

This study shows that multinationality could be an effective way for emerging market firms to reduce business risk. This study helps identify CEO characteristics that are associated with real option performance and emphasizes that CEO personal attitudes and abilities could influence the real options flexibility obtained from multinationality. This study also contributes to the understanding of micro foundations in international business by focusing on the role of CEO characteristics and the CEO–TMT interface in the downside risk implications of multinationality.

The purpose of this paper is to explore how multinationality affects multinational companies’ (MNCs) downside risk and the moderate effects of ownership structure in the setting of emerging markets based on Chinese publicly traded manufacturing MNCs.

The author derives hypotheses based on real options theory and agency theory, and tests hypotheses by using Tobit model and a unique data set of Chinese A-shared publicly traded manufacturing MNCs in the period of 2010–2016.

The empirical results suggest that multinationality is positively related to downside risk and this effect is subjected to ownership structure for firms in emerging markets. In particular, multinationality of MNCs with a high level of ownership concentration, managerial ownership and institutional ownership is more likely to reduce downside risk.

The main conclusion of this paper highlights the importance of ownership structure of MNCs in explaining the real options value of multinationality, and conveys to owners of MNCs in China and other emerging markets the need to strengthen firms’ governance if they want to maximize the benefits of multinational operations.

This study extends existing studies by taking ownership structure into consideration and highlighting the importance of agency problem in the examination of multinationality and downside risk, which provides a potential explanation for previous mixed evidence. This study also provides new evidence for the relationship between multinationality and downside risk by using a unique sample from China, an emerging market country.

We examine whether firms’ multinationality leads to better performance and what the role of R&D investment is in the multinationality performance linkage. Unlike the previous studies, we employ both accounting‐ and market‐based measures of firm performance for a large sample of U.S. manufacturing firms. Our results show that the empirical relation between multinationality and performance is not monotonic but varies with the phase of a firm’s multinationality, starting with a negative relation initially, followed by a positive one, and then again a negative one. This horizontal S‐shaped curvilinear relation of multinationality is more pronounced for the market‐based performance measure and is supportive of the three‐stage theory of internationalization. We also find that a firm’s multinationality is related to greater firm performance when the firm possesses R&D investment, and that the effect of R&D increases with the extent of a firm’s multinationality. These results lend strong support for the Internalization theory and the resource‐based view of firms’ international expansion. Our results are robust to different model specifications with an alternative measure of multinationality.

Discusses three theories on the link between multinationality and investment value (internalization, imperfect world capital markets and managerial objectives) and develops hypotheses on its relationship with the informativeness of accounting earnings and levels of discretionary accruals. Tests them on 1994‐1998 data from a sample of US multinationals using regression techniques; and presents the results which suggest that the level of multinationality is positively related to the magnitude of discretionary accruals and to the informativeness of accounting earnings.

Refers to previous research on the firm characteristics which affect the relationship between unexpected returns and unexpected earnings to suggest that multinationality may proxy for all of them. Develops mathematical models to investigate the effect of multinationality and applies them to 1995‐1999 US data on multinational firms. Describes the methodology and presents the results, which suggest that firms with relatively more multinationality have smaller, less significant earnings response coefficients and vice versa. Concludes that multinationality is a good proxy for firm size, quality of preannouncement information, earnings predictability etc.

Previous theoretical explanations and empirical analyses of the multinationality‐performance relationship have produced mixed arguments and results. Linear and inverted U‐shaped relationships have been theorized and confirmed empirically. Recent research has theorized that there is a three‐stage, sigmoid relationship between multinationality and performance. We contribute to the debate by showing that the impact of multinationality depends on the time dimension incorporated in the performance measure; that is, the net benefits from multinationality are likely to be higher in the longer term. The results from our sample of US manufacturing multinationals indicate that there is a three‐stage, sigmoid multinationality‐performance relationship.

The main objective of the present chapter is to address empirically the impacts of institutional distance (ID) on the multinationality level of firms from developing countries and interpret how the interaction between ID and firm resources affects firms from developing countries. Using data of firms from developing countries, we estimated an empirical cross-section model. The results show that while cultural distance was not found statistically significant, ID, on the other hand, was statistically significant. The higher the distance between home and host country, the higher the multinationality of firms from developing countries. We also found a positive and statistically significant correlation between intangible resource and multinationality, which suggests a tendency toward new pattern in the internationalization of firms from emerging economies.

This study aims to understand the performance implications of when a business internationalizes. Many managers take the performance implications of internationalization for granted. Whether seeking a broader customer base or cost reduction through cross-border outsourcing, the overwhelming belief is that internationalization leads to higher profits.

This paper offers a systematic review, content analysis and cross-tabulation analysis of 115 empirical studies from over 40 major journals in management, strategy and international business between 1977 and 2021. Focusing on research settings, sample characteristics, underlying theoretical approaches, measurements of key variables and moderators influencing the multinationality and performance relationship, this study offers a detailed account of definitions and effects.

The findings of this study suggest a tenuous connection between internationalization and performance. No strain of research literature conclusively identifies a consistent direct path from internationalization to performance. The context specificity of the relationship makes general declarations impossible.

Future researchers should recognize that internationalization is a process taking different forms, with no specific dominant form. General declarations are misleading. The focus should be on the process of internationalization rather than on the outcome.

This study contributes to the international business literature by exploring reasons for the inconsistent results and lack of consensus. Through a detailed account of definitions and effects, this paper explores the lack of consensus as well as the identified shapes of the relationship.