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Multinationality and Performance: A Context-Specific Analysis for German Firms

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  • Marcus Dittfeld

    (TU Dresden, Chair of International Management)

Abstract

The development of foreign markets can be considered as a strategic key factor in times of globalisation. However, past empirical research could not detect a “universal” relationship between corporate multinationality and performance. There exist fundamental doubts whether the contextual condition of internationalisation of one empirical setting can be easily transferred to another setting for investigating the relationship between multinationality and performance. For instance, potentials for realising economies of scale in the home market and abroad, the degree of integration of neighbouring countries, as well as the accumulated internationalisation experience, can differ significantly from each other between countries. Taking into account the contextual conditions of internationalisation of stock-listed German firms in the time period from 1990 to 2006, this paper analyses the performance effects of firms’ multinationality. Firms of this sample can benefit from multinationality even in early internationalisation stages and are able to manage high degrees of complexity in later internationalisation stages successfully. Firm-specific advantages in the field of intangible assets with long-term (short-term) effects moderate the relationship between multinationality and future-oriented (past-oriented) performance positive.

Suggested Citation

  • Marcus Dittfeld, 2017. "Multinationality and Performance: A Context-Specific Analysis for German Firms," Management International Review, Springer, vol. 57(1), pages 1-35, February.
    • Handle: RePEc:spr:manint:v:57:y:2017:i:1:d:10.1007_s11575-016-0286-7
    DOI: 10.1007/s11575-016-0286-7
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    2. Tanja Leppäaho & Tuija Mainela & Eriikka Paavilainen-Mäntymäki, 2023. "Opportunity beliefs in internationalization: A microhistorical approach," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(7), pages 1298-1312, September.
    3. Nguyen, Quyen T.K. & Kim, Sylvia, 2020. "The multinationality and performance relationship: Revisiting the literature and exploring the implications," International Business Review, Elsevier, vol. 29(2).
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    6. Powell, K. Skylar & Lim, Eunah, 2018. "‘Misfits’ DO try to fit: Deviations from firm-specific optimal multinationality and subsequent market entry or exit in US law firms," Journal of Business Research, Elsevier, vol. 82(C), pages 141-148.
    7. Juergensen, Jill Josefina & Narula, Rajneesh & Surdu, Irina, 2022. "A systematic review of the relationship between international diversification and innovation: A firm-level perspective," International Business Review, Elsevier, vol. 31(2).

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