Balancing growth across geographic diversification and product diversification: A contingency approach
We theorize that firms simultaneously seek to balance their growth across both the geographic and product diversification domains. To achieve this balance, businesses commonly adopt a strategy of expanding an under-diversified direction at the expense of an over-diversified one. Accordingly, we depict geographic diversification and product diversification as being an endogenous relationship, from which we hypothesize that firms that have under-diversified in a given direction and over-diversified in the other will expand the former at the expense of the latter. Meanwhile, firms that have under-diversified in both directions will expand both diversification paths, while firms that have over-diversified in both directions will contract in both diversification routes. We investigate these predicted relationships and show them empirically using a sample of leading Japanese multinationals in the 1990–2000 period.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 21 (2012)
Issue (Month): 6 ()
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/bibliographic|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lenn Gomes & Kannan Ramaswamy, 1999. "An Empirical Examination of the Form of the Relationship Between Multinationality and Performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(1), pages 173-187, March.
- Farok J Contractor & Sumit K Kundu & Chin-Chun Hsu, 2003. "A three-stage theory of international expansion: the link between multinationality and performance in the service sector," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 34(1), pages 5-18, January.
- Wolf, Bernard M, 1977. "Industrial Diversification and Internationalization: Some Empirical Evidence," Journal of Industrial Economics, Wiley Blackwell, vol. 26(2), pages 177-191, December.
- Sukpanich, Nessara & Rugman, Alan, 2007. "Intra-regional sales, product diversity, and the performance of merchandising multinationals," Journal of International Management, Elsevier, vol. 13(2), pages 131-146, June.
- Daniel Sullivan, 1994. "Measuring the Degree of Internationalization of a Firm," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 25(2), pages 325-342, June.
- Nessara Sukpanich & Alan M. Rugman, 2007. "Intra-regional Sales, Product Diversity, and Performance in Merchandising Multinationals," Working Papers 2007-09, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
- Mike Peng & Andrew Delios, 2006. "What determines the scope of the firm over time and around the world? An Asia Pacific perspective," Asia Pacific Journal of Management, Springer, vol. 23(4), pages 385-405, December.
- Danchi Tan & Joseph T. Mahoney, 2005. "Examining the Penrose effect in an international business context: the dynamics of Japanese firm growth in US industries," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 113-127.
- Mudambi, R. & Mudambi, S. M., 2002. "Diversification and market entry choices in the context of foreign direct investment," International Business Review, Elsevier, vol. 11(1), pages 35-55, February.
- Davies, Stephen W. & Rondi, Laura & Sembenelli, Alessandro, 2001. "Are multinationality and diversification complementary or substitute strategies?: An empirical analysis on European leading firms," International Journal of Industrial Organization, Elsevier, vol. 19(8), pages 1315-1346, September.
- Robert M Grant, 1987. "Multinationality and Performance among British Manufacturing Companies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 18(3), pages 79-89, September.
- Klaus E. Meyer, 2006. "Globalfocusing: From Domestic Conglomerates to Global Specialists," Journal of Management Studies, Wiley Blackwell, vol. 43(5), pages 1109-1144, 07.
- Dunning, John H., 2000. "The eclectic paradigm as an envelope for economic and business theories of MNE activity," International Business Review, Elsevier, vol. 9(2), pages 163-190, April.
- Brian S. Silverman, 1999. "Technological Resources and the Direction of Corporate Diversification: Toward an Integration of the Resource-Based View and Transaction Cost Economics," Management Science, INFORMS, vol. 45(8), pages 1109-1124, August.
When requesting a correction, please mention this item's handle: RePEc:eee:iburev:v:21:y:2012:i:6:p:1052-1064. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If references are entirely missing, you can add them using this form.