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An empirical analysis and extension of internalization theory in emerging markets: The role of firm-specific assets and asset dispersion in the multinationality-performance relationship

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  • Kirca, Ahmet H.
  • Fernandez, Whitney Douglas
  • Kundu, Sumit K.

Abstract

This study examines the relationship between firm multinationality and financial performance with a focus on firm-specific assets and dispersion of these assets for MNCs from emerging markets. Drawing upon internalization theory, the authors reveal that while the financial performance of manufacturing MNCs depends on technological assets, service MNCs are more dependent on marketing assets to succeed in international markets. Study findings further emphasize the critical role of the industry context in emerging markets as the authors demonstrate that international asset dispersion weakens the effects of internationalization on financial performance more for MNCs in manufacturing industries than for MNCs in services.

Suggested Citation

  • Kirca, Ahmet H. & Fernandez, Whitney Douglas & Kundu, Sumit K., 2016. "An empirical analysis and extension of internalization theory in emerging markets: The role of firm-specific assets and asset dispersion in the multinationality-performance relationship," Journal of World Business, Elsevier, vol. 51(4), pages 628-640.
    • Handle: RePEc:eee:worbus:v:51:y:2016:i:4:p:628-640
    DOI: 10.1016/j.jwb.2016.03.003
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    19. Li-Jen Yeh & Jia-Ying Hu & Zongyi Chen, 2021. "The Internationalization-Performance Relationship of Small-and-Medium-sized Enterprises: The Case of Taiwan’s ESCO Industry," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 11(1), pages 1-3.
    20. Powell, K. Skylar & Lim, Eunah, 2018. "‘Misfits’ DO try to fit: Deviations from firm-specific optimal multinationality and subsequent market entry or exit in US law firms," Journal of Business Research, Elsevier, vol. 82(C), pages 141-148.
    21. Juergensen, Jill Josefina & Narula, Rajneesh & Surdu, Irina, 2022. "A systematic review of the relationship between international diversification and innovation: A firm-level perspective," International Business Review, Elsevier, vol. 31(2).
    22. Lee, Jeoung Yul & Jiménez, Alfredo & Yang, Young Soo & Irisboev, Ilkhom, 2022. "The evolution of emerging market firms and time until subsidiary exit: Competitive dynamics of domestic market followers and contingency factors," Journal of Business Research, Elsevier, vol. 145(C), pages 694-704.

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