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More is less? The dual effect of international diversification on emerging market new ventures' innovation performance

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  • Wang, Yueqi
  • Li, Wen Helena
  • Liu, Wei

Abstract

Considering the learning advantages and liabilities that emerging market new ventures (EMNVs) encounter in their international expansion, can they capitalize on investments in multiple countries and generate innovation outcomes? Drawing on the resource orchestration perspective, we elucidate the dual and contingent nexus between international diversification and innovation performance among EMNVs. By arguing that international diversification divergently influences resource acquisition and resource allocation mechanisms required for innovation, we posit two opposing effects that lead to an inverted U-shaped relationship between an EMNV's international diversification and innovation performance. Moreover, this nonlinear relationship, we propose, is attenuated by subsidies an EMNV receives from its home government. Using a panel dataset of 246 Chinese new ventures that were publicly listed in the ChiNext Market during 2009–2017, our predictions are supported. Overall, this study contributes to international entrepreneurship literature by revealing when and how international diversification helps or hinders EMNVs' innovation performance.

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  • Wang, Yueqi & Li, Wen Helena & Liu, Wei, 2026. "More is less? The dual effect of international diversification on emerging market new ventures' innovation performance," Journal of International Management, Elsevier, vol. 32(2).
    • Handle: RePEc:eee:intman:v:32:y:2026:i:2:s1075425326000013
    DOI: 10.1016/j.intman.2026.101327
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