IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v51y2019i30p3274-3292.html
   My bibliography  Save this article

The determinants of firms’ global diversification decisions

Author

Listed:
  • Catalina Hurwitz
  • Wen-Hsiu Chou
  • Chun-Hao Chang
  • Arun Prakash

Abstract

Why do some firms choose to be ‘born global’ and become early internationalizing firms (EIFs) while others choose to be ‘born-again global’ and develop into late internationalizing firms (LIFs)? What are the main factors impacting a firm’s decision on the timing of global diversification? Based on the theories of diversification, this study examines the role of peer influence and desire for growth on the timing of a firm’s globalization decision. We further study the idiosyncratic risk and the adoption of technological innovation hypotheses on global diversification. Our results document that innovation efficiency strongly enhances EIFs’ propensity to global diversification. On the other hand, peer pressure and idiosyncratic risk level significantly influence EIFs not to globalize. In contrast, LIFs are positively influenced by their industry peers, showing how young and mature companies respond to the market competition in a different manner.

Suggested Citation

  • Catalina Hurwitz & Wen-Hsiu Chou & Chun-Hao Chang & Arun Prakash, 2019. "The determinants of firms’ global diversification decisions," Applied Economics, Taylor & Francis Journals, vol. 51(30), pages 3274-3292, June.
    • Handle: RePEc:taf:applec:v:51:y:2019:i:30:p:3274-3292
    DOI: 10.1080/00036846.2019.1566690
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2019.1566690
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2019.1566690?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:51:y:2019:i:30:p:3274-3292. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.