Performance effects of intra- and inter-regional expansion: the moderating role of firm-specific advantages

Ral-Trebacz, Arkadiusz; Eckert, Stefan

doi:10.21511/ppm.14(3).2016.01

Cited by 4 publications

(15 citation statements)

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“…Furthermore, in those regions where the returns are relatively lower than others, that is, those which can be considered to be relatively more "difficult" to operate in, the MNE's product diversity becomes critical. Thus, our research contributes to the regionalization literature by introducing the simultaneous impact of regions explicitly into the analysis and is able to shed new light onto the widely discussed internationalization-performance puzzle within international business (Nguyen, 2017;Ral-Trebacz and Eckert, 2016).…”

Section: Introductionmentioning

confidence: 93%

“…Several scholars have explored the regional dimension and its impact on performance, notable among them Qian et al (2008Qian et al ( , 2013 and more recently, Ral-Trebacz and Eckert (2016), however, there is a clear point of departure in the focus of this study. Whereas different regions are treated homogenously in prior research, we explore the impact of operations across multiple regions explicitly and simultaneously.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

“…In some of the above cases, the contradictory findings may be attributable to methodological issues, such as, endogeneity and measurement errors (Hennart, 2011;Verbeke and Asmussen, 2016), nevertheless, the "regional" perspective has an important role to play in resolving the discrepanciesfrom both theoretical and empirical perspectives (Nguyen, 2017;Ral-Trebacz and Eckert, 2016). The region provides a balance between the context specificity of host countries, versus the more general view of internationalization as a homogenous activity outside the home country or region, and this becomes relevant for two important reasons.…”

Section: International Operations Regionalization and Performancementioning

confidence: 99%

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Which regions matter for MNEs? The role of regional and firm level differences

Demirbağ

Glaister

Sengupta

2020

Journal of World Business

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This paper explores the impact of regional and firm level heterogeneity on MNE performance from an operational perspective. We find that the underlying economic growth of a region and the MNE's overall product diversity significantly impact returns from downstream operations in specific regions.Based on a 10 year panel dataset of 1249 US based MNEs, results show that the incremental impact of the degree and speed of operations within a given region, is greater for regions exhibiting faster economic growth than for slower growing ones. For slower growing regions only, product diversity of the MNE becomes important and negatively moderates the link between operations and performance.Previous literature has shown that MNEs largely follow a regional strategy and has ignored the role of inter-regional differences, and how firm level characteristics interact with region specific ones. Once inter-regional heterogeneity is introduced, a more complex picture of the internationalization performance link emerges than has been addressed previously, with significant implications for the theory and practise of internationalization.

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Section: Introductionmentioning

confidence: 93%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Section: International Operations Regionalization and Performancementioning

confidence: 99%

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Which regions matter for MNEs? The role of regional and firm level differences

Demirbağ

Glaister

Sengupta

2020

Journal of World Business

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“…Scholars thus proposed the associations between internationalization and firm performance to be positively or negatively linear (Grant, 1987;Kim and Lyn, 1987;Michel and Shaked, 1986;Dikova et al, 2016), U shaped (Qian, 1997;Ruigrok and Wagner, 2003;Capar and Kotabe, 2003;Thomas, 2006), inverted U shaped (Hitt et al, 1997;Gomes and Ramaswamy, 1999;Jung, 2007), and even S shaped three-phases curvilinear (Lu and Beamish, 2004;Contractor et al, 2002). Although the findings of the above studies hold significant implication for internationalization and performance research (Asmussen, 2009;Geringer et al, 2000;Wan and Hoskisson, 2003), some researchers argue that the mixed and inconsistent results are due to ignoring the critical regional dimensions of multinationality (Rugman and Verbeke, 2004;Ral-Trebacz and Eckert, 2016). A region can be defined as an area in which the culture, consumer needs, living standard and economic development are similar (Berry, 2004).…”

mentioning

confidence: 99%

“…A region can be defined as an area in which the culture, consumer needs, living standard and economic development are similar (Berry, 2004). Augmenting the investment in a region can reduce the average cost of administration, coordination, transportation and distribution and the knowledge sharing will be easier (Eisingerich et al, 2010;Grant, 1987;Rugman and Oh, 2010;Ral-Trebacz and Eckert, 2016). A firm can refer to prior experience to reduce economic and strategic errors, and can also integrate different resources, thus diluting the learning costs in the region (Qian et al, 2008).…”

mentioning

confidence: 99%

The effect of inter- and intra-regional geographic diversification strategies on firm performance in China

Tsai

Ren

Eisingerich

2020

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Purpose The purpose of this paper is to theorize and empirically examine the effects of intra- and inter-regional geographic diversification on firm performance in China. Furthermore, it investigates they key firm capabilities, which moderate the relationships between intra- and inter-regional geographic diversification and firm performance. Design/methodology/approach In this research, the authors studied 366 listed companies that invest in mainland China. The authors used the Taiwan Economy Journal database to construct a panel data set from 2005 to 2014 and employed panel regression estimations as part of the empirical analyses. Findings The authors find that the effect of regional diversification on firm performance is significantly influenced by the contexts of the expansion. More specifically, the results show that the effect of intra-regional geographic diversification on firm performance takes the form of a U-shape relationship. In contrast, the authors find that inter-regional geographic diversification has a negative effect on firm performance. Firm marketing, research and development (R&D) and managerial capabilities moderate these relationships. Research limitations/implications First, the companies studied in this research are mainly Taiwanese manufacturers with investments in mainland China. Second, the current model can be expanded by exploring additional process explanations and moderators in future research. Practical implications An important practical implication of this research is that when firms choose an intra-regional expansion strategy in China, they should adopt a moderate provincial diversification strategy in the invested region and reinforce its marketing capability to enhance firm performance. A careful consideration of a firm’s marketing, R&D and managerial capabilities is needed for successful regional diversification strategies in the China market. Originality/value The findings of this study contribute significantly to the existing literature on firms’ regional diversification. First, the authors explore and empirically test intra- and inter-regional geographic diversification strategies in China. The authors find that the effect of regional diversification on firm performance varies according to the contexts of the expansion (for instance, global, regional, in a single country). Second, this study furthers the research theme of intra- and inter-regional diversification by introducing and investigating previously unexplored firm capabilities as part of the framework.

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The value of internationalization

Ral-Trebacz

Eckert

Dittfeld

2018

MBR

Self Cite

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Purpose Current discussions in the international business community have demonstrated that the focus of MNCs operations tends to be more regional than global. This paper aims to investigate the performance effects of intra-regional and inter-regional strategy among large companies in European countries. Design/methodology/approach The authors test the research hypothesis on a sample of 25 largest European companies from six regional, as well as global-oriented, industries using the random effects model. Findings The authors find that an increase in a firm’s degree of regionalization leads to value enhancement. On the other side, the results reveal that an inter-regional strategy is associated with value discount. Moreover, empirical findings show that the higher the degree of inter-regional expansion the more pronounced is the effect of firm-specific assets related to marketing on performance. Hence, the negative valuation impact of an inter-regional strategy may be attenuated or even overcome through the interplay of inter-regional internationalization and firm-specific assets related to marketing. Originality/value By introducing a theoretical framework, the authors discuss the performance effects of regional-oriented and inter-regional-oriented strategies. Furthermore, they investigate the moderating effect of inter-regional expansion on the performance impact of firm-specific assets related to marketing in the case of large companies. Empirically, they test the hypotheses on a sample of large firms for an 11-year period using different measurements regarding the degree of intra-regional and inter-regional expansion.

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Performance effects of intra- and inter-regional expansion: the moderating role of firm-specific advantages

Cited by 4 publications

References 52 publications

Which regions matter for MNEs? The role of regional and firm level differences

Which regions matter for MNEs? The role of regional and firm level differences

The effect of inter- and intra-regional geographic diversification strategies on firm performance in China

The value of internationalization

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