The Performance and Risk Management Implications of Multinationality: An Industry Perspective

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    Abstract

    Multinational enterprise in control of dispersed overseas resources and capabilities has been linked to strategic flexibility that allows the firm to take advantage of opportunities and manage exposures imposed by changing environmental conditions. This paper analyzes the implied performance and risk management effects in a comprehensive sample of public firms and finds supportive evidence for the proposition that multinationality can enhance performance across industries. However, the ability to exploit upside potential and avoid downside risk is industry specific. The positive effects of multinationality are found particularly pronounced among firms operating in knowledge intensive service industries while firms in capital-intensive primary industries display the inverse relationships. Keywords: Strategic flexibility, Real options, Risk management
    Original languageEnglish
    Place of PublicationKøbenhavn
    PublisherDjøf Forlag
    Number of pages33
    ISBN (Print)8791815126
    Publication statusPublished - 2005

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