Journal of International Business Studies

, Volume 39, Issue 2, pp 197–214

Regional diversification and firm performance

Article

Abstract

This study examines how regional diversification affects firm performance. The results indicate that regional diversification has linear and curvilinear effects on firm performance. Regional diversification enhances firm performance linearly up to a certain threshold, and then its impact becomes negative. The results also show that firms of developed countries maximize their performance when they operate across a moderate number of developed regions and a strictly limited number of developing regions. This explains why internationalization by most international firms is regional rather than global.

Keywords

multinational enterprises regional diversification firm performance 

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Copyright information

© Academy of International Business 2008

Authors and Affiliations

  1. 1.The Chinese University of Hong KongHong KongChina
  2. 2.York UniversityCanada
  3. 3.Hong Kong Baptist UniversityHong Kong
  4. 4.Xiamen UniversityXiamenChina

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