IDEAS home Printed from https://ideas.repec.org/a/eee/intman/v4y1998i3p201-221.html
   My bibliography  Save this article

An empirical examination of the influence of industry and firm drivers on the rate of internationalization by firms

Author

Listed:
  • Elango, B.

Abstract

Foreign direct investment made by firms globally rose by 40 percent to $315 billion in 1995 compared with the previous year. In spite of the apparent importance of globalization, very little research has examined the factors with potential to influence the rate of internationalization of firms. Using 158 large U.S.-based multinational firms drawn from seven different industries, this study explains about 24 percent of the variance of the rate of internationalization. Results indicate that global market growth rate, domestic market growth rate, relative size of domestic market to international market, employee productivity, administrative investments, as well as new plant and equipment influence the rate of internationalization of firms.

Suggested Citation

  • Elango, B., 1998. "An empirical examination of the influence of industry and firm drivers on the rate of internationalization by firms," Journal of International Management, Elsevier, vol. 4(3), pages 201-221, November.
    • Handle: RePEc:eee:intman:v:4:y:1998:i:3:p:201-221
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1075425398000118
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Caves, Richard E, 1980. "Industrial Organization, Corporate Strategy and Structure," Journal of Economic Literature, American Economic Association, vol. 18(1), pages 64-92, March.
    2. Hymer, Stephen, 1970. "The Efficiency (Contradictions) of Multinational Corporations," American Economic Review, American Economic Association, vol. 60(2), pages 441-448, May.
    3. Oliver E. Williamson, 1991. "Strategizing, economizing, and economic organization," Strategic Management Journal, Wiley Blackwell, vol. 12(S2), pages 75-94, December.
    4. Edward M. Graham, 1978. "Transatlantic Investment by Multinational Firms: A Rivalistic Phenomenon?," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 1(1), pages 82-99, October.
    5. J Markham Collins, 1990. "A Market Performance Comparison of U.S. Firms Active in Domestic, Developed and Developing Countries," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 21(2), pages 271-287, June.
    6. Bradburd, Ralph M & Caves, Richard E, 1982. "A Closer Look at the Effect of Market Growth on Industries' Profits," The Review of Economics and Statistics, MIT Press, vol. 64(4), pages 635-645, November.
    7. Sanjaya Lall, 1980. "The Pattern of Intra-Firm Exports by US Multinationals," Palgrave Macmillan Books, in: The Multinational Corporation, chapter 4, pages 93-109, Palgrave Macmillan.
    8. Rugman, Alan M, 1986. "New Theories of the Multinational Enterprise: An Assessment of Internalization Theory," Bulletin of Economic Research, Wiley Blackwell, vol. 38(2), pages 101-118, May.
    9. Rolf Bühner, 1987. "Assessing international diversification of West German corporations," Strategic Management Journal, Wiley Blackwell, vol. 8(1), pages 25-37, January.
    10. Peter J. Buckley & Mark Casson, 1985. "The Economic Theory of the Multinational Enterprise," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-05242-4.
    11. Curry, B & George, K D, 1983. "Industrial Concentration: A Survey," Journal of Industrial Economics, Wiley Blackwell, vol. 31(3), pages 203-255, March.
    12. W. Chan Kim & Peter Hwang & William P. Burgers, 1989. "Global diversification strategy and corporate profit performance," Strategic Management Journal, Wiley Blackwell, vol. 10(1), pages 45-57, January.
    13. Peter J. Buckley, 1985. "A Critical View of Theories of the Multinational Enterprise," Palgrave Macmillan Books, in: The Economic Theory of the Multinational Enterprise, chapter 1, pages 1-19, Palgrave Macmillan.
    14. Raymond Vernon, 1966. "International Investment and International Trade in the Product Cycle," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 80(2), pages 190-207.
    15. Robert M Grant, 1987. "Multinationality and Performance among British Manufacturing Companies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 18(3), pages 79-89, September.
    16. Briance Mascarenhas, 1986. "International Strategies of Non-Dominant Firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 17(1), pages 1-25, March.
    17. Alan Rugman, 1980. "Internalization as a general theory of foreign direct investment: A re-appraisal of the literature," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 116(2), pages 365-379, June.
    18. Shapiro, Helen & Taylor, Lance, 1990. "The state and industrial strategy," World Development, Elsevier, vol. 18(6), pages 861-878, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Balasubramanian Elango & S. Prakash Sethi, 2007. "An exploration of the relationship between country of origin (COE) and the internationalization-performance paradigm," Management International Review, Springer, vol. 47(3), pages 369-392, June.
    2. Elango, B. & Dhandapani, Karthik, 2020. "Does institutional industry context matter to performance? An extension of the institution-based view," Journal of Business Research, Elsevier, vol. 115(C), pages 139-148.
    3. Kerai, Anita & Kumar, Vikas & Singla, Chitra, 2023. "Impact of TMT structural power asymmetry on family firm internationalization," International Business Review, Elsevier, vol. 32(4).
    4. Ele Reiljan, 2006. "The role of entrepreneurial actions in the de-internationalization of Estonian enterprises: entrepreneurs’ perceptions," University of Tartu - Faculty of Economics and Business Administration, in: Entrepreneurship in Estonia: policies, practices, education and research, volume 28, chapter 7, pages 139-153, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    5. Aaltonen, Päivi Hanna Maria, 2020. "Piecing together a puzzle—A review and research agenda on internationalization and the promise of exaptation," International Business Review, Elsevier, vol. 29(4).
    6. Alice Civera & Michele Meoli & Silvio Vismara, 2019. "Do academic spinoffs internationalize?," The Journal of Technology Transfer, Springer, vol. 44(2), pages 381-403, April.
    7. Zúñiga-Vicente, José Ángel & Benito-Osorio, Diana & Guerras-Martín, Luis Ángel & Colino, Alberto, 2019. "The effects of international diversification on the link between product diversification and performance in a boom and bust cycle: Evidence from Spanish firms (1994–2014)," Journal of International Management, Elsevier, vol. 25(4).
    8. Zhang, Yijing & Toppinen, Anne & Uusivuori, Jussi, 2014. "Internationalization of the forest products industry: A synthesis of literature and implications for future research," Forest Policy and Economics, Elsevier, vol. 38(C), pages 8-16.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bell, J.H.J., 1996. "Joint or Single Venturing? : An Electric Approach to Foreign Entry Mode Choice," Other publications TiSEM 06f84735-3cf5-432f-8bc8-c, Tilburg University, School of Economics and Management.
    2. Sukpanich, Nessara & Rugman, Alan, 2007. "Intra-regional sales, product diversity, and the performance of merchandising multinationals," Journal of International Management, Elsevier, vol. 13(2), pages 131-146, June.
    3. Isabel Faeth, 2009. "Determinants Of Foreign Direct Investment – A Tale Of Nine Theoretical Models," Journal of Economic Surveys, Wiley Blackwell, vol. 23(1), pages 165-196, February.
    4. Robert-Nicoud, Frédéric & Olarreaga, Marcelo & Carrère, Céline & Fugazza, Marco, 2016. "On the heterogeneous effect of trade on unemployment," CEPR Discussion Papers 11540, C.E.P.R. Discussion Papers.
    5. Yong Yang & Nigel Driffield, 2012. "Multinationality-Performance Relationship," Management International Review, Springer, vol. 52(1), pages 23-47, February.
    6. Christos N. Pitelis & David J. Teece, 2018. "The New MNE: ‘Orchestration’ Theory as Envelope of ‘Internalisation’ Theory," Management International Review, Springer, vol. 58(4), pages 523-539, August.
    7. Borsos-Torstila, Julianna, . "The Determinants of Foreign Direct Investment Operations of Finnish MNCs in Transition Economies 1990-1995," ETLA A, The Research Institute of the Finnish Economy, number 28, June.
    8. Contractor, Farok J. & Kumar, Vikas & Kundu, Sumit K., 2007. "Nature of the relationship between international expansion and performance: The case of emerging market firms," Journal of World Business, Elsevier, vol. 42(4), pages 401-417, December.
    9. Balasubramanian Elango & S. Prakash Sethi, 2007. "An exploration of the relationship between country of origin (COE) and the internationalization-performance paradigm," Management International Review, Springer, vol. 47(3), pages 369-392, June.
    10. Gilroy, Bernard Michael, 1987. "The role of intra-firm trade," MPRA Paper 18039, University Library of Munich, Germany.
    11. Reddy, Kotapati Srinivasa, 2016. "Institutional Voids and Tax litigation in Emerging Economies: The verdict of Vodafone cross-border acquisition of Hutchison," MPRA Paper 74264, University Library of Munich, Germany, revised 2016.
    12. Riahi-Belkaoui, Ahmed, 1998. "The effects of the degree of internationalization on firm performance," International Business Review, Elsevier, vol. 7(3), pages 315-321, June.
    13. Subramanian Rangan & Metin Sengul, 2009. "Information technology and transnational integration: Theory and evidence on the evolution of the modern multinational enterprise," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(9), pages 1496-1514, December.
    14. Clegg, Jeremy & Lin, Hsin Mei & Voss, Hinrich & Yen, I-Fan & Shih, Yi Tien, 2016. "The OFDI patterns and firm performance of Chinese firms: The moderating effects of multinationality strategy and external factors," International Business Review, Elsevier, vol. 25(4), pages 971-985.
    15. Elango, B., 2010. "Influence of industry type on the relationship between international operations and risk," Journal of Business Research, Elsevier, vol. 63(3), pages 303-309, March.
    16. Iavor Marangozov, 2005. "From Practice to Theory of the International Joint Ventures," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 44-77.
    17. Chris Wagner, 2020. "Deducing a state-of-the-art presentation of the Eclectic Paradigm from four decades of development: a systematic literature review," Management Review Quarterly, Springer, vol. 70(1), pages 51-96, February.
    18. Henk Kox, 2001. "Exposure of the business services industry to international competition," CPB Document 10.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    19. Pradhan, Jaya Prakash, 2007. "National Innovation System and the Emergence of Indian Information and Software Technology Multinationals," MPRA Paper 12359, University Library of Munich, Germany.
    20. Nicole Franziska Richter, 2014. "Information Costs in International Business: Analyzing the Effects of Economies of Scale, Cultural Diversity and Decentralization," Management International Review, Springer, vol. 54(2), pages 171-193, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:intman:v:4:y:1998:i:3:p:201-221. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/601266/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.