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Causal analysis of the internationalization and performance relationship based on neural networks -- advocating the transnational structure

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  • Garbe, Jan-Nicolas
  • Richter, Nicole Franziska
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    Abstract

    Although the impact of internationalization on firm performance is still controversial, we find that internationalization does not have an ongoing positive performance effect. The international expansion of MNEs needs to be managed carefully, especially after a certain level of international involvement is surpassed. One theoretically highly accepted, but empirically neglected, driver of the success of international business is the establishment of an appropriate international organizational structure. This paper is the first to empirically address the question of how international organizational structure decisions affect performance by means of a new analysis technique -- a causal analysis based on neural networks. Referring to UNCTAD's 100 most international corporations, the key finding of this study is that successful high internationalization involves a transnational structure in which elements of centralization and decentralization are well balanced.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of International Management.

    Volume (Year): 15 (2009)
    Issue (Month): 4 (December)
    Pages: 413-431

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    Handle: RePEc:eee:intman:v:15:y:2009:i:4:p:413-431

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    Cited by:
    1. Wang, Chi-Feng & Chen, Li-Yu & Chang, Shao-Chi, 2011. "International diversification and the market value of new product introduction," Journal of International Management, Elsevier, vol. 17(4), pages 333-347.
    2. Aurora A.C. Teixeira & Marlene Grande, 2013. "Determinants of the economic performance of Portuguese Academic Spin-offs: do Science & Technology infrastructures and support matter?," FEP Working Papers 502, Universidade do Porto, Faculdade de Economia do Porto.

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