The international performance of standardizing and customizing Spanish firms

Abstract

If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -This paper aims to shed new light on the multinationality-performance debate by examining the performance of standardizing versus customizing firms from Spain. Design/methodology/approach -The reasons for variations in performance of exporting firms build on the industrial organization and resource-based views of strategy, which are shown to be linked to the integration (standardization) versus responsiveness (customization) framework of international business. The paper also incorporates the Uppsala model and the home region nature of international business activity. It develops hypotheses for both standardizing and customizing paths of international expansion for exporting firms. The paper uses the Survey on Business Strategies which has the support of the Ministry of Industry of Spain. This databank collects data of a representative sample of the Spanish manufacturing sector. The paper uses fixed-effects regression models for the period 2000-2008.Findings -The paper provides evidence on how firms with a strategy of product standardization follow an M curve-fourth degree polynomial relationship between the degree of internationalization (DOI) and performance. In contrast, product customization firms are observed to follow an inverted M curve relationship. Furthermore, by using both models, an appropriate level of internationalization can be suggested. Originality/value -The paper provides theoretical and empirical support for the different relationships of standardizing and customizing firms when expanding abroad. This paper is one of the first to find empirical support for an M curve relationship between the DOI and performance, and certainly is the first one testing and corroborating an inverted M curve.

The M Curve and the Performance of Spanish International New Ventures

“…This new thinking about how international activities are not globalized but regionalized (Rugman and Verbeke, 2004) has been confirmed, across various industries and time periods, by many papers (Beleska-Spasova and Glaister, 2009;Lee and Marvel, 2009;Rugman and Oh, 2010). Previously Rugman and Almodóvar (2011) and Almodóvar (2011Almodóvar ( , 2012 demonstrated that most international Spanish firms expand within their home region of the triad. It is difficult for them to transfer their business models to other regions out of the EU.…”

“…There are three main fits: a U-shaped relationship (Capar and Kotabe, 2003;Lu and Beamish, 2001;Ruigrok and Wagner, 2003); an inverted U-shaped relationship (Brock,Yaffe and Dembovsky, 2006;Gomes and Ramaswamy, 1999;Hitt, Hoskisson and Kim, 1997); and an S curve (Bae, Park and Wang 2008;Contractor, Kundu and Hsu, 2003;Lu and Beamish, 2004). There is also discussion of an inverted S curve (Chiang and Yu, 2005;Contractor, Kundu and Hsu, 2003;Ruigrok, Amann and Wagner, 2007), an M curve (Almodóvar, 2012;Lee, 2010) and an inverted M-curve relationship (Almodóvar, 2012).…”

International diversification, ownership structure and performance in an emerging market: evidence from Chile

“…The traditional argument to explain the formation of pyramidal structures is the separation of cash flow rights from control rights (Almeida & Wolfenzon, 2006). As cash flow rights as well as the control of the main owner are typically used in the definitions of Claessens et al (2002) and Faccio and Lang (2002), the first is measured by the sum of the products of the ownership proportion along the control chain, whereas the latter is measured as the minimal ownership proportion along the control chain.…”

“…As cash flow rights as well as the control of the main owner are typically used in the definitions of Claessens et al (2002) and Faccio and Lang (2002), the first is measured by the sum of the products of the ownership proportion along the control chain, whereas the latter is measured as the minimal ownership proportion along the control chain. Thus, literature argues that it is common to adopt a pyramidal ownership structure when there is greater separation of control rights from cash flow rights (Almeida & Wolfenzon, 2006;Claessens et al, 2000), what is known as excess control rights.…”

“…As variables of the ownership structure we use the Excess of voting rights (DVDFC) as a proxy for a pyramidal ownership structure (Jara-Bertin et al, 2015), where DVDFC corresponds to the separation of cash flow rights from control rights. The traditional argument to explain the formation of pyramidal structures is the separation of cash flow rights from control rights (Almeida & Wolfenzon, 2006). Therefore, we calculated the quotient between control rights and cash flow rights as an approximation to pyramidal structure.…”