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A relational view on the performance effects of international diversification strategies

Author

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  • H. Emre Yildiz

    (Mälardalen University)

  • Sergey Morgulis-Yakushev

    (Stockholm School of Economics)

  • Ulf Holm

    (Uppsala University)

  • Mikael Eriksson

    (Stockholm School of Economics
    Uppsala University)

Abstract

International diversification is a fundamental pillar of multinational corporations’ (MNCs) growth strategies. Consequently, there is a considerable body of research on the performance implications of MNCs’ international diversification strategies. We extend this literature by adopting a relational view where we compare the diversification profiles of firms in an inter-organizational context. We argue that the relative characteristics of firms’ and their partners’ diversification profiles is an indicator of parties’ resource bases and thereby can explain if and when inter-organizational ties yield optimum performance outcomes. We examine these relative characteristics and propose a conceptual refinement by differentiating between the degree and content dimensions of international diversification. Analyzing data from 202 manufacturing firms from the S&P 500 list, we find that firms achieve optimum performance when their partners have moderately higher degrees of international diversification and a moderate overlap of presence in foreign markets.

Suggested Citation

  • H. Emre Yildiz & Sergey Morgulis-Yakushev & Ulf Holm & Mikael Eriksson, 2023. "A relational view on the performance effects of international diversification strategies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(1), pages 203-217, February.
    • Handle: RePEc:pal:jintbs:v:54:y:2023:i:1:d:10.1057_s41267-022-00516-8
    DOI: 10.1057/s41267-022-00516-8
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    Cited by:

    1. Ando, Naoki, 2024. "Multinationals’ intraregional geographic expansion and foreign subsidiary performance," International Business Review, Elsevier, vol. 33(1).

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