A theoretical assessment of the empirical literature on the impact of multinationality on performance
- 13 May 2011
- journal article
- performance and-global-strategy
- Published by Wiley in Global Strategy Journal
- Vol. 1 (1-2) , 135-151
Abstract
I assess the theoretical basis for the existence of a relationship between the size of a firm's foreign footprint (its multinationality) and its performance. I argue that multinationality results from a firm's choice between coordinating internally the stages of its value chain and letting them be organized on the market and hence that there are no reasons to expect net gains from an increase or a decrease in multinationality, the only profitability impact coming from a firm having made the wrong choice and being over‐ or under‐integrated compared to the optimum. I then show that the way the literature has operationalized multinationality does not match the theoretical arguments it has advanced. I conclude that a reassessment of the literature is overdue and point to some new directions.Keywords
This publication has 55 references indexed in Scilit:
- Transaction Cost Theory and International BusinessJournal of Retailing, 2010
- International corporate diversification and performance: Does firm self-selection matter?Journal of International Business Studies, 2008
- Do multinationals really prefer to enter culturally distant countries through greenfields rather than through acquisitions? The role of parent experience and subsidiary autonomyJournal of International Business Studies, 2008
- Multinationality and performance: A synthetic review and research agendaInternational Journal of Management Reviews, 2007
- The Empirics of Multinationality and Performance2007
- The Cost of Misaligned Governance in R&D AlliancesThe Journal of Law, Economics, and Organization, 2004
- Why Firms Want to Organize Efficiently and what Keeps Them from Doing So: Inappropriate Governance, Performance, and Adaptation in a Deregulated IndustryAdministrative Science Quarterly, 2003
- Integrating Variable Risk Preferences, Trust, and Transaction Cost EconomicsAcademy of Management Review, 1996
- THE ‘COMPARATIVE INSTITUTIONAL’ THEORY OF THE FIRM: SOME IMPLICATIONS FOR CORPORATE STRATEGY*Journal of Management Studies, 1994
- Multinationals' diversification and the risk‐return trade‐offStrategic Management Journal, 1993