Session 208
Internationalization Strategies and Performance
Track G |
Date: Tuesday, October 6, 2015 |
Track X |
Time: 17:30 – 18:45 |
Paper |
Room: Governor's Square 11 |
Session Chair:
- TBD
Abstract: We extend the literature on the relationship between speed of internationalization and performance by analyzing the effect of a rapid foreign expansion on value creation, as well as the boundary conditions for a profitable accelerated internationalization. We argue that the relationship between speed and value creation follows an inverted U-shaped pattern. We also predict that firms’ resources and capabilities help enhance the positive effect of a rapid internationalization on their market performance. On the contrary, higher needs for adaptation of multinationals’ strategies or the existence of restrictions to their future growth intensify its negative impact. We test and confirm our hypotheses by implementing Heckman’s two-step estimation method (1979) on a panel-data sample from 1986 to 2010 which comprises Spanish firms which were listed in 1990.
Abstract: We examine the effect of multinationality on firm performance using detailed longitudinal data for a comprehensive sample of US manufacturing MNCs from 1989 to 2007, while accounting for the endogeneity of multinationality. We show that while firm performance has a positive effect on multinationality, multinationality has an insignificant effect on performance once we account for its endogeneity. Looking beyond an aggregate measure of multinationality, we show that firms do benefit from investments in foreign R&D activities and product transfers between subsidiaries. Overall, these findings offer fresh empirical insight into the relationship between multinationality and performance, providing a substantially more rigorous test of the relationship while opening the way for further exploration of the effect of foreign knowledge seeking and subsidiary networks on firm performance.
Abstract: An MNC’s choice of its functional language(s) for corporate communication is of strategic importance because this decision has strong implications for the implementation of its international expansion strategy. Drawing on psycholinguistics, we advance a conceptual framework for analyzing the trade-offs in the choice of functional languages and use a series of lab experiments to assess the relative efficiency of different functional language systems. Our empirical results shed light on the trade-offs in this strategic decision and potential remedies for the communication costs associated with the different choices. The insights that our study gains on the choice of functional languages and the measures for mitigating communication costs contribute to the microfoundations for both the established theory of MNCs and the emerging capability-based theory of MNCs.
Abstract: Based on the marginal benefits and marginal costs arising out of internationalization, its overall effect on performance is widely accepted to have a horizontal S-curve shape. The relationship has been tested across different empirical settings including those from emerging markets. In this paper, we argue that dynamic capabilities such as invest in resources and to deploy them appropriately enable firms to improve the positive effects of internationalization. We test our hypotheses using data on internationalization of 837 Indian firms between 1995 and 2014. Our results support the horizontal S-curve relationship including the high internationalization with a negative performance effect. We also find support for a moderating role of dynamic capabilities in enhancing the performance effects of internationalization.
All Sessions in Track G...
- Sun: 08:00 – 09:15
- Session 32: Microfoundations of international strategic management: Opportunism, trust, and bounded reliability
- Sun: 09:45 – 11:00
- Session 279: Formal theory in strategy - A primer
- Sun: 11:15 – 12:30
- Session 33: Methodological challenges in publishing international strategy research
- Sun: 16:15 – 17:30
- Session 209: Institutions and Emerging Markets
- Sun: 17:45 – 00:00
- Session 315: Global Strategy Business Meeting
- Mon: 08:00 – 09:15
- Session 126: Entry Mode & Cross-Border Acquisitions
- Mon: 11:15 – 12:30
- Session 149: Management and Coordination of Multinationals
- Mon: 13:45 – 15:00
- Session 128: Emerging Markets
- Mon: 16:45 – 18:00
- Session 151: Networks and Collaborative Arrangements
- Tue: 08:00 – 09:15
- Session 129: Foreign Direct Investments
- Tue: 11:00 – 12:15
- Session 127: Institutional Context
- Tue: 14:15 – 15:30
- Session 266: Offshoring
- Tue: 15:45 – 17:00
- Session 130: International Diversification
- Session 150: Location and Geography
- Tue: 17:30 – 18:45
- Session 208: Internationalization Strategies and Performance
- Sun: 08:00 – 09:15
- Session 74: Open Strategy Workshops: Lessons Learned from Practising Strategizing
- Sun: 09:45 – 11:00
- Session 29: The Elephant in the Room: How public policy and institutions help drive innovation, entrepreneurship, and firm performance
- Session 76: The evolution of the strategy as a profession and the field of strategy
- Sun: 11:15 – 12:30
- Session 12: Environmental Entrepreneurship: How and When do Entrepreneurs address Environmental Degradation?
- Session 38: Big Game Hunting: Accessing and Interacting with Senior Executives for Empirical Research
- Sun: 13:45 – 14:30
- Session 307: Lifetime Achievement Award Recipient
- Sun: 14:45 – 15:45
- Session 7: New Frontiers in Technologies, Fields, and Business Models: Implications for Academic and Practice Knowledge Creation
- Sun: 16:15 – 17:30
- Session 61: The Institutional Level of Strategizing Activities
- Session 261: Knowledge Creation and Sharing in Virtual Communities
- Mon: 08:00 – 09:15
- Session 72: External Influences: Audiences and Media
- Session 126: Entry Mode & Cross-Border Acquisitions
- Session 140: New Perspectives on the Outside Director Selection Process
- Mon: 09:45 – 11:00
- Session 8: Elevating our Understanding of Organizational Performance: Bridging the Frontiers of Business and Corporate Strategies
- Mon: 11:15 – 12:30
- Session 149: Management and Coordination of Multinationals
- Session 220: Perspectives on CEO Compensation
- Mon: 13:45 – 15:00
- Session 16: Human Capital and Innovation
- Session 37: Political Ties: Knots or Bows?
- Session 63: Political and Material Aspects of Strategy Making
- Session 97: Accelerators, corporate VCs and new venture creation
- Session 258: Explainng CSR: External Factors
- Mon: 15:15 – 16:15
- Session 227: Mergers, Acquisitions and Divestitures: Reconfiguring Resource Bases for Value Creation and Growth
- Session 308: Strategy Beyond the Firm: Creating and Capturing Value from External Resources
- Session 310: When the Smoke Clears: The Emergence of the Cannabis Industry
- Session 311: Theory Fragmentation in Strategic Management?
- Session 312: Climate Change: Why and How Should Strategic Management Care?
- Mon: 16:45 – 18:00
- Session 42: The Word is Out! Stakeholder Responses to Public Signals of Firms' Behaviors
- Session 112: Acquisitions - Before the Deal
- Tue: 08:00 – 09:15
- Session 309: Looking Good and Sounding Better: Impression Management by CEOs
- Tue: 09:45 – 10:45
- Session 9: Whatever Happened to Theory in Strategic Management?
- Tue: 11:00 – 12:15
- Session 70: CEO Characteristics: Microfoundations of Behavioral Strategy
- Tue: 14:15 – 15:30
- Session 116: Acquisitions - After the Deal
- Tue: 15:45 – 17:00
- Session 52: Entrepreneurial business models
- Session 219: A Tough Crowd: Critical Examinations by Owners and Stakeholders
- Session 262: Pioneering Knowledge
- Tue: 17:30 – 18:45
- Session 144: Board Structure: What Works Best?
- Session 208: Internationalization Strategies and Performance