Internationalization and Firm Performance (eBook)

Dr. Mario Krist promovierte bei Prof. Dr. Andreas Bausch am Lehrstuhl für Strategisches Management und Controlling der Jacobs University Bremen. Er ist als Mitarbeiter im Strategischen Controlling der Bayer AG tätig.

Foreword 7
Summary of Contents 9
Table of Contents 10
Introduction 15
The Effect of Context-Related Moderators on theInternationalization-Performance Relationship:Evidence from Meta-Analysis 37
Intangible Resources and their Effect on the Internationalization-Performance Relationship 84
Intangible Resources and the Internationalization Process:Path Dependence of Building a ProfitableMultinational Company 144
Conclusion 183
Appendix 195

Chapter 3 Intangible Resources and their Effect on the Internationalization-Performance Relationship (S. 71-72)

3.1 Introduction

Meta-analytic evidence from chapter two strengthens the notion that a generally applicable form of the internationalization-performance relationship does not exist but that this relationship is highly context dependent. Two lines of inquiry can be distinguished in contemporary research that are based on such an understanding. One investigates performance consequences from varying degrees of internationalization while the other discusses firm specific differences as decisive factors that might be responsible for differences in the internationalization-performance relationship (Lu and Beamish, 2004). The first research stream examines the benefit-cost trade-off from internationalization.

A fundamental statement is that this trade-off is not constant but varies along the internationalization continuum. Consequently there must be one (or several) optimal degree(s) of internationalization for every firm. Following this rationale scholars have tried to merge empirical findings of either a positive or a negative linear effect of internationalization on performance by remodeling the shape of this relationship. As already outlined in the introduction section of this book, results vary from u-shaped curve types to inverted u-shaped curve types and cubic curve types. But until now, there is no consensus on a universal form of the internationalization-performance relationship.

Ruigrok, Wagner, and Amann (2004) propose that the shape of the relationship itself is context related, depending on the size of the home market and the possibility to pursue a cultural or institutional related kind of international expansion. The second research stream proposes that firm level characteristics constitute a major distinguishing feature if and how internationalization relates to firm performance. This line of research can be traced back to Hymer (1976) who identified firm specific advantage as a driver of internationalization and Dunning (1979) who refined the idea of Hymer by examining different kinds of production inputs that can lead to the growth of the MNC.

Later on, scholars of the resource based view characterized intangible resources as major drivers of success in markets, as they accord to the VRIN1 criteria (Bloodgood, Sapienza, and Almeida, 1996). In their seminal work Morck and Yeung (1991) confirm this notion and assert that internationalization per se is not a valuable strategy for investors, whereas the impact of R&,D spending and advertising expenditures on market value increases with a firm’s multinational scale.

Other researchers like Christophe (1997) did not find empirical support for this proposition and doubt the generalization of the positive impact of intangible resources on success when expanding business abroad. In order to understand more fully the nature of the internationalization-performance relationship and resolve apparent contradictory empirical evidence more empirical research is advisable, particularly on samples beyond those from the US and across different periods of time.

Therefore, this chapter addresses the question how internationalization relates to firm performance for a sample of publicly listed German firms. Specifically, the present chapter seeks to give answers to the following two research questions: (1) How does the shape of this relationship vary across different degrees of internationalization? And (2) how is the relationship between internationalization and firm performance moderated by intangible resources?