ISSN 2167-0439
International Journal of Management and Business Studies ISSN 2167-0439 Vol. 8 (10), pp. 001-008, October, 2018. © International Scholars Journals
Full Length Research Paper
Internationalization and firm performance: Exploring the moderating effects of regional diversification
Wei-Hwa Pan1, Wei-Chun Tsai2* and Tsung-Yen Kuo1
1Department of Management, National Yunlin University of Science and Technology, Taiwan.
2Department of Information Management, WuFeng University, Taiwan.
Accepted 16 April, 2018
Abstract
Previous studies provided mixed results on the impact of internationalization on firm performance. We argue that internationalization can be classified into two geographic dimensions: Country and regional diversification. This paper examines the configuration effect of country and regional diversification on firm performance. Using longitudinal data containing firm-level operation information during 2002-2005, the empirical investigation indicates that an inverted U-shaped relationship exists between regional diversification and performance. The study also finds that regional diversification has a moderating effect on the relationship between country diversification and firm performance. The results indicate that geographic configurations affect performance. For a lower level of regional diversification, a lower level of country diversification results in enhanced performance.
Key words: Internationalization, geographic configuration, country diversification, regional diversification.