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Article
Publication date: 15 June 2012

Lars Matysiak and Andreas Bausch

The purpose of this paper is to summarize theoretical insights about key antecedents of multinational enterprise (MNE) performance and to review and synthesize empirically…

Abstract

Purpose

The purpose of this paper is to summarize theoretical insights about key antecedents of multinational enterprise (MNE) performance and to review and synthesize empirically researched antecedents of MNE performance.

Design/methodology/approach

Dominant strategic management approaches to explaining the performance of firms in general are the market‐based view and the resource‐based view. The dominant theory of the MNE from the field of international business is internalization theory. Integrating these three perspectives, this paper elaborates where key antecedents of MNE performance can be expected. Furthermore, this paper reviews empirical research on antecedents of MNE performance published in three top business journals of major importance to the field of international business between 1976 and 2010, thereby synthesizing the most widely accepted knowledge about antecedents of MNE performance.

Findings

The paper reveals that theory suggests that key antecedents of MNE performance can be expected at the industry, country, and firm levels. Empirical research, however, hardly offers insights concerning antecedents at these three levels of analysis. Instead, empirical studies have predominantly focused on the intermediate variable of multinationality.

Originality/value

Previous research on antecedents of MNE performance has, by and large, been blinded by the obvious: multinationality has been researched innumerable times, without considering essential theories regarding performance and the MNE. This paper points out that there is much promise in going back to fundamental theories regarding performance and the MNE in order to advance our understanding of key antecedents of MNE performance.

Open Access
Article
Publication date: 8 July 2022

Alice Schmuck, Katarina Lagerström and James Sallis

This study aims to understand the performance implications of when a business internationalizes. Many managers take the performance implications of internationalization…

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Research limitations/implications

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.

Originality/value

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.

Details

critical perspectives on international business, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1742-2043

Keywords

Article
Publication date: 27 January 2021

Ohad Ref and Itzhak Gnizy

The relationship between multinationality and firm performance is a central issue in the international marketing and business literatures. Predominantly, this body of…

Abstract

Purpose

The relationship between multinationality and firm performance is a central issue in the international marketing and business literatures. Predominantly, this body of research has tried to identify a single, generalized pattern for this relationship. However, despite the vast number of studies, results have been characterized as mixed or inconsistent. In this study, we take a fresh look at this relationship.

Design/methodology/approach

We focus on a key inducement to expand firm multinationality – the search for a more efficient way to exploit firm resources, and also on a specific operationalization of multinationality – firm geographic scope. We use a formal analytical model analyzing the trade-off between benefits and costs arising from expanding firm geographic scope and emphasizing the role of lumpy costs emanating from resource indivisibility.

Findings

The relationship between geographic scope and performance cannot be confined to a single pattern, but instead, may have any one of a set of patterns: negatively monotonic shape, inverted U-shape, S-shape, M-shape or, multiple-wave inverted U-shape.

Practical implications

The current study offers managers some guidelines to identify which of the above patterns fits their firm's specific case, and to identify the optimal level of geographic scope for their firm.

Originality/value

We conclude that the search for a single, generalized pattern for multinationality-performance is largely futile, whereas the focus on specific inducements and operationalizations for multinationality allows us to explain when and why specific patterns are more likely to occur.

Details

International Marketing Review, vol. 38 no. 3
Type: Research Article
ISSN: 0265-1335

Keywords

Article
Publication date: 2 September 2013

In Hyeock (Ian) Lee

Using data from a sample of new high technology manufacturing start-ups in Korea, the purpose of this paper is to examine the multinationality-performance relationship of…

Abstract

Purpose

Using data from a sample of new high technology manufacturing start-ups in Korea, the purpose of this paper is to examine the multinationality-performance relationship of international new ventures (INVs) which are born regional in terms of exporting activities.

Design/methodology/approach

The paper estimates econometric models as both cubic and quartic fits between the degree of multinationality and firm performance of Korean INVs using a feasible generalized least square (FGLS) regression method.

Findings

It is found that the relationship between the INVs' degree of multinationality and firm performance is M-shaped, supporting the augmentation from the traditional S-curve fit applied to multinational enterprises (MNEs). In addition, in terms of performance implications, high technology manufacturing INVs perform better in their home region than in non-home regions when the degree of multinationality is mediocre or becomes very high. Finally, these findings hold for diverse performance measures.

Originality/value

This paper assesses if it is really needed to go beyond the S-shaped curve with a sample of INVs, and how much the addition of the fourth degree polynomial term may increase the empirical model's explained variance between the two model specifications.

Book part
Publication date: 2 September 2010

Bo Bernhard Nielsen and Sabina Nielsen

This paper offers a discussion of the key multilevel issues pertaining to the multinationality–performance (M–P) relationship. Arguably, one of the most important areas of…

Abstract

This paper offers a discussion of the key multilevel issues pertaining to the multinationality–performance (M–P) relationship. Arguably, one of the most important areas of research in international business, firm internationalization and its consequences are multilevel phenomena, influenced by forces at different managerial and structural levels: from the executive, subsidiary and firm, to the country and industry. We suggest that accounting for important factors at each level and for their cross-level interactions may help reconcile inconsistent findings and advance our understanding of the M–P relationship. Based on a critical review of the literature, we offer recommendations regarding the appropriate levels of theory, measurement, and analysis to guide future research.

Details

The Past, Present and Future of International Business & Management
Type: Book
ISBN: 978-0-85724-085-9

Article
Publication date: 9 March 2020

Anish Purkayastha, Sunil Sharma and Amit Karna

In this paper, the authors undertake a systematic analysis of multinationality–performance (M-P) literature published in the last decade, when antecedents for…

Abstract

Purpose

In this paper, the authors undertake a systematic analysis of multinationality–performance (M-P) literature published in the last decade, when antecedents for internationalization and moderators of the M-P relationship had attained a center stage in international business and international management research. Though M-P relationship is one of the most widely studied topics within international business literature, so far synthesis of the entire theoretical landscape is missing in extant literature.

Design/methodology/approach

Through keywords search process, the authors found 111 studies in management literature that look at internationalization, its antecedents, performance of internationalized firms, and moderators of the M-P relationship. The focus of this study is to identify theoretical foundations used to explain the antecedents and moderators in M-P relationship, in order to suggest the future research direction for the field. The authors classify the antecedents and moderators based on their theoretical underpinnings not only to identify commonly used theoretical foundations in the last 10 years of international strategy research but also to highlight potential areas for future research.

Findings

The authors’ analysis indicates that research on international strategy in the last decade was dominated by theory testing in the context of developed economies. The authors’ review suggests that majority of the antecedents and moderators in the M-P relationship are anchored within institutional theory, organizational structure, resource-based view, social capital, and upper echelon theory.

Originality/value

The authors’ findings are indicative of a rich research potential of M-P relationship in the contextual research setting of emerging markets while leveraging more diversified theoretical bases and multiple levels of research design.

Details

Cross Cultural & Strategic Management, vol. 27 no. 2
Type: Research Article
ISSN: 2059-5794

Keywords

Article
Publication date: 14 September 2021

Ncamsile Ashley Nkambule, Wei-Kang Wang, Irene Wei Kiong Ting and Wen-Min Lu

The main purpose of this study is to empirically investigate the impact of intellectual capital efficiency on US multinational software companies' performance from 2012 to…

Abstract

Purpose

The main purpose of this study is to empirically investigate the impact of intellectual capital efficiency on US multinational software companies' performance from 2012 to 2016 by applying data envelopment analysis (DEA).

Design/methodology/approach

It adopts a new slacks-based measure (SBM) to obtain a more accurate performance estimation and rank between companies. Regression analysis is used to test the overall IC and each of its elements (Human Capital, Innovation Capital, Process Capital and Customer Capital).

Findings

The univariate result shows that multinational companies are more efficient than non-multinational companies. However, the regression result shows that multinationality can hardly explain the firm efficiency of software firms. Another interesting finding is that intellectual capital has a positive and significant impact on software firm performance in the US human capital influences firm efficiency directly. However, when human capital is combined with the other elements of IC, the contribution of human capital becomes less significant. This is because people may think that innovation capital, process capital and customer capital can replace human capital, but it is not. In short, human capital may affect firm efficiency through other elements of IC (innovation capital, process capital and customer capital) as it is the base of other elements.

Research limitations/implications

The results show that multinational companies have higher efficiency scores than non-multinational companies. In addition, Intellectual capital has a positive and significant impact on software firm performance in the US human capital influences firm efficiency directly. However, when human capital is combined with the other elements of IC, the contribution of human capital becomes less significant. This is because people may think that innovation capital, process capital and customer capital can replace human capital, but it is not. In short, human capital may affect firm efficiency through other elements of IC (innovation capital, process capital and customer capital) as it is the base of other elements.

Practical implications

Overall, the study highlights the needs of having intellectual capital and its elements (Human Capital, Innovation Capital, Process Capital and Customer Capital) to increase firm efficiency.

Originality/value

First, the authors use a more comprehensive elements of IC, which are human capital, innovation capital, process capital and customer capital for a better IC measurement. Second, this study makes the first attempt using the DSBM model via DEA to examine the operating efficiency of US multinational software firms.

Details

Journal of Intellectual Capital, vol. 23 no. 6
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 11 March 2011

Quyen T.K. Nguyen

This paper aims to provide a synthetic review of the empirical literature on the multinational enterprise (MNE), subsidiaries and performance.

1447

Abstract

Purpose

This paper aims to provide a synthetic review of the empirical literature on the multinational enterprise (MNE), subsidiaries and performance.

Design/methodology/approach

The paper examines the following: the theoretical and conceptual foundation of multinationality (M) and performance (P) measures; the impact of MNE strategic investment motives on performance; the influence of contextual external and internal environment factors on performance; the strategy to optimize value chain activities of the MNE by cooperating with external partners in an asymmetric network, the key drivers of enhanced shareholder value and the implications of performance; and the need to access primary data provided by firms and managers themselves when analyzing the internal functioning of the MNE and its subsidiaries.

Findings

The overall message from this literature review is that empirical research should be designed on the basis of relevant theoretical and conceptual foundations of the performance construct.

Originality/value

The paper provides a systematic and synthetic review of theoretical and empirical literature.

Details

Multinational Business Review, vol. 19 no. 1
Type: Research Article
ISSN: 1525-383X

Keywords

Article
Publication date: 16 November 2012

Alina Kudina

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…

1661

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.

Details

Multinational Business Review, vol. 20 no. 4
Type: Research Article
ISSN: 1525-383X

Keywords

Book part
Publication date: 30 May 2013

Jean-François Hennart

In this chapter I would like to recall how I got started on my research on the multinational enterprise (MNE) and outline how my thinking on this important economic…

Abstract

In this chapter I would like to recall how I got started on my research on the multinational enterprise (MNE) and outline how my thinking on this important economic institution has evolved through the years.11I thank Sondra Grace of Gracefully Put for editing this manuscript.

Details

Philosophy of Science and Meta-Knowledge in International Business and Management
Type: Book
ISBN: 978-1-78190-713-9

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