The empirics of multinationality and performance
The relationship between a firm’s degree of multinationality and its performance is perhaps the most studied relationship in the field of international business. In this paper I address issues concerning the empirical estimation of this relationship. I argue for greater delineation of the underlying nature of firms’ multinationality and I point to several statistical issues regarding estimation that appear to need resolution, but which appear to have been largely neglected in the international business literature. Among these are endogeneity of the multinationality construct in the performance relationship and the likelihood that the multinationality-performance relationship is heterogeneous across firms.
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