Multinational Risk and Performance Outcomes: Effects of Knowledge Intensity and Industry Context

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    Abstrakt

    A multinational presence can diversify corporate business activities and provide access to diverse overseas resources. This can enhance operational flexibility and create new business propositions that increase responsiveness to global market changes. Establishing an international corporate structure may also require irreversible investments and impose maintenance and processing costs that contravene the implied resilience and agility benefits. We distinguish between downside risk and upside potential as the relevant outcome measures to assess the implied advantages of multinationality. Consistent with the rationales of the OLI paradigm, we argue that multinational reach particularly in knowledge-based industries can reduce downside risk and enhance upside potential. These results introduce more nuances to the ongoing debate about multinational risk and performance effects. Based on a large cross-sectional dataset, we find that flexibility and responsiveness thrives on a multinational presence among firms operating in information-driven knowledge businesses. In contrast, internationalizing firms in capital-based network services display adverse risk effects.
    OriginalsprogEngelsk
    TidsskriftInternational Business Review
    Vol/bind21
    Udgave nummer2
    Sider (fra-til)139-152
    Antal sider14
    ISSN0969-5931
    DOI
    StatusUdgivet - 2012

    Bibliografisk note

    Available online 16 April 2011

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