Abstract
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We conduct a Meta-analysis of 54 papers that study the relationship between multinationality and firm performance. The aim is to understand if any systematic relationships exist between the characteristics of each study and the reported results of linear and curvilinear regressions to examine the multinationality-performance relationship.
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Our main finding, robust to different specifications and to different weights for each observation, is that when analysis is based on non-US data, the reported return to multinationality is higher. However, this relationship for non-US firms is usually U-shaped rather than inverted U-shaped. This indicates that US firms face lower returns to internationalization than other firms but are less likely to incur losses in the early stages of internationalization.
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The findings also highlight the differences that are reported when comparing regression and non-regression based techniques. Our results suggest that in this area regression based analysis is more reliable than say ANOVA or other related approaches.
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Other characteristics that influence the estimated rate of return and its shape across different studies are: the measure of multinationality used; size distribution of the sample; and the use of market-based indicators to measure firm performance. Finally, we find no evidence of publication bias.
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Notes
This ranking information is available in Harvey et al. (2008).
This reports the marginal effect of the outcome probability to be an inverted U-shape curve with respect to study characteristics .
It is important to emphasize that there are a group of studies used other dependent variables, such as innovation, patent and technical efficiency. However, in order to focus our analysis on comparable studies, we consider only those that use accounting/market-based performance.
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Acknowledgements
We are very grateful to anonymous referees of this journal for their constructive comments on an earlier version of this paper. The authors gratefully acknowledge the financial support from the ESRC under RES-062-23-0986. We also thank Stephen Tallman, Suma Athreye, Pedro Martins, Teresa da Silva Lopes, Sushanta Mallick, Richard Kneller and the anonymous referees careful reading of my paper and insightful comments and suggestions for improvement, particularly the issue of curvilinearity. We also thank Simon Mohun, Tomasz Mickiewicz, Yadong Luo, and participants at Workshop 2008 at Queen Mary, University of London and AIB 2010 conference at Rio de Janeiro, for helpful comments. All errors are our own.
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Yang, Y., Driffield, N. Multinationality-Performance Relationship. Manag Int Rev 52, 23–47 (2012). https://doi.org/10.1007/s11575-011-0095-y
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DOI: https://doi.org/10.1007/s11575-011-0095-y