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International diversification and performance: A study of global law firms

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  • Brock, David M.
  • Yaffe, Tal
  • Dembovsky, Mark

Abstract

This paper is an exploration of the internationalization-performance relationship in the context of contemporary knowledge intensive services. After background literature, we build theory in the context of service firms to explain how performance in international diversification largely depends on building various relevant organizational competencies. We develop two hypotheses: one concerning a reverse u-shaped internationalization-performance function for these firms in general, and another differentiating between U.S. and U.K. firms. Data on 76 U.S. and 13 U.K. firms are analyzed using hierarchical regression. The findings sustain the reverse u-shaped internationalization-performance relationship for these firms in general, but also suggest that the prospects are quite different for U.S. versus U.K. firms. Our findings add to an emerging stream of research that indicates a resolution to the hitherto ambiguous internationalization-performance relationship; and we also suggest a convergence between findings in capital-intensive and knowledge-intensive industries. The paper concludes with some implications for practitioners.

Suggested Citation

  • Brock, David M. & Yaffe, Tal & Dembovsky, Mark, 2006. "International diversification and performance: A study of global law firms," Journal of International Management, Elsevier, vol. 12(4), pages 473-489, December.
  • Handle: RePEc:eee:intman:v:12:y:2006:i:4:p:473-489
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    References listed on IDEAS

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    1. repec:eee:iburev:v:26:y:2017:i:5:p:867-880 is not listed on IDEAS
    2. Ivan De Noni & Roberta Apa, 2015. "The moderating effect of exploitative and exploratory learning on internationalisation–performance relationship in SMEs," Journal of International Entrepreneurship, Springer, vol. 13(2), pages 96-117, June.
    3. Chao, Mike Chen-Ho & Kumar, Vikas, 2010. "The impact of institutional distance on the international diversity-performance relationship," Journal of World Business, Elsevier, vol. 45(1), pages 93-103, January.
    4. LiPuma, Joseph A., 2012. "Internationalization and the IPO performance of new ventures," Journal of Business Research, Elsevier, vol. 65(7), pages 914-921.
    5. Nahg Abdul Majid Alawi & Azhar Abdul Rahman & Azlan Amran & Mehran Nejati, 2016. "Does family group affiliation matter in CSR reporting? Evidence from Yemen," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 6(1), pages 12-30.
    6. Wang, Chi-Feng & Chen, Li-Yu & Chang, Shao-Chi, 2011. "International diversification and the market value of new product introduction," Journal of International Management, Elsevier, vol. 17(4), pages 333-347.
    7. Christian Genthon, 2008. "International diversification, performance and offshoring : the case of the computer services industry," Post-Print halshs-00348198, HAL.
    8. Lin, Wen-Ting & Liu, Yunshi & Cheng, Kuei-Yang, 2011. "The internationalization and performance of a firm: Moderating effect of a firm's behavior," Journal of International Management, Elsevier, vol. 17(1), pages 83-95, March.
    9. Segal-Horn, Susan & Dean, Alison, 2009. "Delivering 'effortless experience' across borders: Managing internal consistency in professional service firms," Journal of World Business, Elsevier, vol. 44(1), pages 41-50, January.

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