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The impact of institutional distance on the international diversity-performance relationship

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  • Chao, Mike Chen-Ho
  • Kumar, Vikas
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    Abstract

    We investigated the impact of institutional distance on the international diversity-performance relationship. We first discussed the international diversity-performance relationship for large multinational firms and later showed the moderation effect of regulative and normative institutional distance. Based on a sample of Fortune 500 firms, we found an inverted U-shaped curve. Regulative institutional distance has a negative moderating effect on the international diversity-performance relationship, while normative institutional distance shows a positive effect.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of World Business.

    Volume (Year): 45 (2010)
    Issue (Month): 1 (January)
    Pages: 93-103

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    Handle: RePEc:eee:worbus:v:45:y:2010:i:1:p:93-103

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    Related research

    Keywords: Institutional distance International diversity Performance Fortune 500 firms Regulative institutional distance Normative institutional distance;

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    Cited by:
    1. Fainshmidt, Stav & White, George O. & Cangioni, Carole, 2014. "Legal Distance, Cognitive Distance, and Conflict Resolution in International Business Intellectual Property Disputes," Journal of International Management, Elsevier, Elsevier, vol. 20(2), pages 188-200.
    2. Banalieva, Elitsa R. & Robertson, Christopher J., 2010. "Performance, diversity, and multiplicity of foreign cross-listing portfolios," International Business Review, Elsevier, vol. 19(6), pages 531-547, December.
    3. Chung, Chris Changwha & Lee, Seung-Hyun & Beamish, Paul W. & Southam, Colette & Nam, Daeil (Dale), 2013. "Pitting real options theory against risk diversification theory: International diversification and joint ownership control in economic crisis," Journal of World Business, Elsevier, Elsevier, vol. 48(1), pages 122-136.
    4. Hsu, Wen-Tsung & Chen, Hsiang-Lan & Cheng, Chia-Yi, 2013. "Internationalization and firm performance of SMEs: The moderating effects of CEO attributes," Journal of World Business, Elsevier, Elsevier, vol. 48(1), pages 1-12.
    5. Jiménez, Alfredo & Delgado-García, Juan Bautista, 2012. "Proactive management of political risk and corporate performance: The case of Spanish multinational enterprises," International Business Review, Elsevier, vol. 21(6), pages 1029-1040.
    6. de Jong, Gjalt & Phan, T. Binh & van Ees, Hans, 2011. "Does the meta-environment determine firm performance? Theory and evidence from European multinational enterprises," International Business Review, Elsevier, vol. 20(4), pages 454-465, August.
    7. Yang, Deli & Sonmez, Mahmut, 2013. "Integration and divergence of patent systems across national and international institutions," Journal of World Business, Elsevier, Elsevier, vol. 48(4), pages 527-538.
    8. de Jong, Gjalt & van Houten, Jerry, 2014. "The impact of MNE cultural diversity on the internationalization-performance relationship," International Business Review, Elsevier, vol. 23(1), pages 313-326.
    9. Muñoz-Bullón, Fernando & Sánchez-Bueno, Maria J., 2012. "Do family ties shape the performance consequences of diversification? Evidence from the European Union," Journal of World Business, Elsevier, Elsevier, vol. 47(3), pages 469-477.

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