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Journal of International Business Studies

, Volume 49, Issue 7, pp 832–857 | Cite as

Internationalization and performance: Degree, duration, and scale of operations

  • Majid Abdi
  • Preet S. Aulakh
Article

Abstract

We assess the theoretical underpinnings and associated empirical findings of the three-stage sigmoid–curve relationship between degree of internationalization (DOI) and performance by re-examining the results reported in one of the prominent studies in the literature. We further conduct our own analyses of 23,474 observations of 2,620 US manufacturing firms over the period 1976–2008 and account for self-selection of firms into different degrees of internationalization by using a generalized propensity score estimator. Both sets of results show that the relationship between DOI and performance conforms to a mostly negative sigmoid curve and does not support the three-stage theorization. Further examination reveals that two major conceptual and empirical shortcomings underlie the disparity between the theoretical predictions of the three-stage model and these empirical findings. First, whereas theory relies overwhelmingly on enhanced scale of operations as a causal mechanism through which internationalization contributes to performance, empirical studies preclude proper identification of scale-related benefits. Second, theory and empirics tend to confuse temporary difficulties experienced upon entry into international markets with examining the benefits realizable at different levels of DOI, regardless of the firm’s short-term difficulties in realizing those benefits. Our empirical results show that correcting for each of these shortcomings contributes to diminishing the theory–empirics gap.

Keywords

internationalization performance sigmoid–curve relationship internationalization knowledge propensity score estimation firm objectives 

Résumé

Nous évaluons les fondements théoriques et les résultats empiriques associés de la relation sigmoïde en trois étapes, entre le degré d'internationalisation (DDI) et la performance, en réexaminant les résultats présentés dans l'une des études les plus marquantes de la littérature. Nous menons en parallèle nos propres analyses sur 23.474 observations de 2.620 entreprises manufacturières américaines au cours de la période 1976-2008 et expliquons l'auto-sélection des firmes par rapport aux différents degrés d'internationalisation en utilisant un estimateur généralisé du coefficient de propension. Les deux séries de résultats montrent que la relation entre le DDI et la performance est conforme à une courbe sigmoïde principalement négative et ne confirme pas la théorisation en trois étapes. Une étude plus approfondie révèle que deux insuffisances conceptuelles et empiriques majeures sous-tendent la disparité entre les prédictions théoriques du modèle à trois étapes et ces résultats empiriques. Tout d'abord, alors que la théorie repose en grande partie sur l'augmentation de l'échelle des opérations en tant que mécanisme causal par lequel l'internationalisation contribue au rendement, les études empiriques excluent une identification adéquate des avantages liés à l'échelle. Deuxièmement, la théorie et les données empiriques tendent à confondre les difficultés temporaires rencontrées lors de l'entrée sur les marchés internationaux avec l'examen des avantages réalisables à différents niveaux du DDI, indépendamment des difficultés à court terme de la firme pour obtenir ces avantages. Nos résultats empiriques montrent que la correction de chacune de ces insuffisances contribue à diminuer l'écart entre la théorie et les données empiriques.

Resumen

Evaluamos los fundamentos teóricos y los hallazgos empíricos asociados a la relación de la curva sigmoidea entre el grado de internacionalización (DOI) y el rendimiento, mediante el re-escrutinio de los resultados reportados en uno de los más prominentes estudios en la literatura. Además, realizamos nuestro propio análisis de 23.474 observaciones de 2.620 empresas manufactureras de los Estados Unidos en el periodo 1976-2008 y explicamos la autoselección de las empresas en diferentes grados de internacionalización mediante el uso de un estimador de puntaje de propensión generalizado. Ambos conjuntos de resultados muestran que la relación entre el grado de internacionalización y el rendimiento se ajustan a una curva sigmoidea negativa y no apoya la teorización de tres etapas. Un examen más detallado muestra que dos importantes deficiencias conceptuales y empíricas subyacen a la disparidad entre las predicciones teóricas de este modelo de tres etapas y estos hallazgos empíricos. Primero, mientras que la teoría se basa abrumadoramente en una escala de operaciones mejoradas como un mecanismo causal mediante el cual la internacionalización contribuye al rendimiento, los estudios científicos impiden una identificación adecuada de los beneficios relacionados con la escala. Segundo, la teoría y los empíricos tienden a confundir dificultades temporales experimentadas al ingresar a los mercados internacionales con el escrutinio de los beneficios alcanzables en diferentes niveles del grado de internacionalización, sin importar las dificultados de corto plazo de la empresa en darse cuenta de esos beneficios. Nuestros resultados empiricos muestran que la corrección de cad una de estas deficiencias contribuye a disminuir la brecha la teoría y lo empírico.

Resumo

Avaliamos os fundamentos teóricos e os achados empíricos associados da relação curvilínea sigmoidal de três estágios entre o grau de internacionalização (DOI) e desempenho, reexaminando os resultados relatados em um dos proeminentes estudos da literatura. Nós ainda conduzimos nossas próprias análises de 23.474 observações de 2.620 empresas de manufatura dos EUA no período 1976-2008 e consideramos a auto-seleção de empresas em diferentes graus de internacionalização usando um estimador generalizado de propensity score. Ambos os conjuntos de resultados mostram que a relação entre DOI e desempenho está em conformidade com uma curva sigmoidal primordialmente negativa e não suporta a teoria de três estágios. Um exame mais aprofundado revela que duas principais deficiências conceituais e empíricas subjazem a disparidade entre as previsões teóricas do modelo de três estágios e esses achados empíricos. Em primeiro lugar, enquanto a teoria depende sobremaneira de operações em escala aprimoradas como um mecanismo causal através do qual a internacionalização contribui para o desempenho, estudos empíricos impedem a identificação adequada de benefícios relacionados à escala. Em segundo lugar, a teoria e o empirismo tendem a confundir as dificuldades temporárias experimentadas após a entrada em mercados internacionais, com a análise dos benefícios realizados em diferentes níveis de DOI, independentemente das dificuldades de curto prazo da empresa na realização desses benefícios. Nossos resultados empíricos mostram que a correção de cada uma dessas falhas contribui para diminuir a lacuna teórico-empírica.

概要

我们通过重新研究文献中的一项著名研究里所报告的结果来评估国际化程度(DOI)与绩效之间的三段式S型曲线关系的理论基础和相关实证研究结果。我们用广义倾向评分估测进而对在1976 - 2008年间2620家美国制造业公司的23474个观察进行分析,并解释处于不同程度国际化的公司的自我选择。两组结果都显示,DOI和绩效之间的关系符合大多是消极的S形曲线,并不支持三段式理论化。进一步研究发现,理论和实证的两个主要的不足揭示了三段式模型的理论预测与这些实证研究结果之间的差距。首先,虽然理论压倒多数地依赖于作为因果机制的业务规模的提升,通过该机制,国际化对业绩做出了贡献,但实证研究排除了与规模有关收益的适当识别。其次,理论和实证研究往往将进入国际市场所经历的暂时困难与在不同的DOI层面实现收益的调查相混淆,不管该公司实现该收益的短期困难如何。我们的实证研究结果表明,对这些缺点每一个都进行修正有助于缩小理论与实证的差距。

Notes

Acknowledgements

Earlier versions of this paper received the Robert J. Litschert Best Student Paper Award from the Strategy Division at the Academy of Management meeting, appeared in the Academy of Management Best Paper Proceedings, and were finalists for the Temple/AIB Best Paper Award and the Barry Richman Best Dissertation Award at the Academy of International Business meeting. The authors would like to thank the JIBS Area Editor, Ram Mudambi, three anonymous reviewers, and session participants in these meetings for their support and valuable comments, which have assisted in the development of this paper. Parts of this manuscript were further developed while the first author was affiliated with the Department of Management and Marketing, University of Melbourne.

Supplementary material

41267_2018_146_MOESM1_ESM.docx (65 kb)
Supplementary material 1 (DOCX 64 kb)

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Copyright information

© Academy of International Business 2018

Authors and Affiliations

  1. 1.University of Sydney Business SchoolUniversity of SydneySydneyAustralia
  2. 2.Schulich School of BusinessYork UniversityTorontoCanada

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