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

    Research output: Working paperResearch

    38 Downloads (Pure)

    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.
    Original languageEnglish
    Place of PublicationKøbenhavn
    PublisherInstitut for Strategic Management and Globalization
    Number of pages33
    ISBN (Print)8791815126
    Publication statusPublished - Nov 2005
    SeriesSMG Working Paper
    Number10/2005

    Keywords

    • Strategic flexibility
    • Real options
    • Risk management

    Cite this