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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.

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.

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.

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.

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.

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.

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.

Previous theoretical explanations and empirical analyses of the multinationality-performance relationship have produced mixed arguments and results. Linear and curvilinear relationships have been theorized and confirmed empirically. This study aims to reconcile earlier mixed findings by incorporating the role of entry mode choice as a moderating variable.

Extensive literature survey is conducted in order to provide an explanation for the different performance patterns of internationalization via licensing, joint venture and wholly owned subsidiary.

Based on the assumptions of Transaction Cost Economics and Organizational Capability perspectives, several research propositions about the multinationality-performance relationship are formulated, which provide a more fine-tuned approach to the performance implications of multinationality.

This paper contributes to multinationality-performance debate by showing that the impact of multinationality depends on the firm-level strategies implemented while going international; to be more precise, the net benefits from multinationality are likely to vary for different modes of foreign market entry.

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.

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.

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.

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.

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.

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.

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.

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.

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.

This paper aims to link location choice and ownership structure to the debate on the multinationality–performance relationship.

This paper draws on a panel data set that covers 1,321 emerging economy multinational enterprises (EMNEs) and includes 4,227 observations from 44 emerging economies between 2004 and, 2013.

The empirical results find that multinationality has a positive effect on EMNEs’ performance, and that this positive effect is larger for their investments in developed countries than in developing countries. The study also finds that this positive effect of foreign operation in developed countries switch to negative at higher levels of multinationality for privately owned EMNEs than for state-owned EMNEs.

This paper provides new empirical evidence to support an institutional perspective of the internationalisation of EMNEs that are investing in developed countries, contributing to the multinationality-performance literature, highlighting the importance of foreign direct investment location decision and ownership structure.

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.

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.

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.

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.

This study investigates how the degree of internationalization (DOI) affects the financial performance of emerging market companies by making the distinction between export intensity and multinationality (i.e. foreign direct investment). The authors argue that the different DOI-performance patterns in the literature relate to different internationalization approaches, which are moderated in distinct ways by formal institutions in the home country.

Based on data of Brazilian firms in several industries and with different internationalization patterns including 100 exporting firms and 30 multinational companies with varying degrees of multinationality over a period of five consecutive years, the authors test their hypotheses using an unbalanced panel data with 346 firm-year observations. In order to test how the quality of formal institutions moderate the DOI-performance relationships, the authors estimate the changes in the slope of the regression line by adding and subtracting one standard deviation to the Worldwide Governance Indicators (WGI) variables.

A positive and linear association between export intensity-performance (EI-P) highlights the location specific comparative advantages of exporting Brazilian firms, while the multinationality-performance (M-P) relationship points to a horizontal S-shape pattern which conforms to the theoretical assumptions of the three-stage internationalization process. Formal institutions moderate positively the EI-P relationship, but moderate negatively each of the three stages of the M-P relationship.

The findings from this study provide critical insights that contribute to the ongoing debate on how formal institutions in the home country affect the DOI-performance relationship of emerging market companies (EMCs). However, the authors consider that it has limitations as they focused exclusively on formal institutions captured by governance institutions in the Brazilian context.

This study provides relevant insights to managers and policy makers. Findings reveal that strong formal institutions in the home country make it easier (cheaper) for EMCs to invest abroad, and, at the same time, increase the efficiency of exporting firms and positively influence financial performance. Moreover, results show that during downturns in their domestic markets, multinational EMCs outperform domestic firms. In that sense, while policy makers can promote the internationalization and competitiveness of EMCs by implementing more supportive formal institutions, managers should consider a proactive approach and invest abroad when conditions in the home country are favorable.

By making the distinction between export intensity and multinationality this study contributes to the literature on the DOI-performance of EMCs providing a more nuanced view on how formal institutions in the home country moderate the EI-P and M-P relationships in different ways.