Effects of internationalization on the performance of multinational companies from developing economies

The relationship between the degree of internationalization and performance of multinational corporations (MNCs) has been widely studied in international business literature. However, most studies have been performed with companies from developed countries. In order to contribute to the development of the theory of internationalization-performance, this study examines this relationship in the universe of MNCs from developing economies. The main objective of this study is to analyze if these MNCs' international expansion strategies are being translated in an efficient and effective way in terms of managing company business. Our sample includes 33 of the 100 most highly internationalized multinational companies (MNCs) from developing economies, and the information was collected over a 6 year period (2004-2009). Data were obtained from two sources: (a) the United Nations Conference on Trade and Development (UNCTAD); and (b) Thomson Reuters Datastream. Multiple regression analysis, Ordinary Least Squares (OLS) method, and panel data analysis found a negative-linear relationship between the degree of internationalization and developing economy MNC performance, indicating that the higher the degree of internationalization, the lower MNC performance tends to be.