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Geographic scope and multinational enterprise performance
Author(s) -
Goerzen Anthony,
Beamish Paul W.
Publication year - 2003
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.357
Subject(s) - multinational corporation , scope (computer science) , argument (complex analysis) , diversity (politics) , asset (computer security) , economic geography , internalization theory , industrial organization , sample (material) , business , structural equation modeling , economics , sociology , computer science , anthropology , biochemistry , chemistry , computer security , finance , chromatography , machine learning , programming language
Through an internalization theory lens, an argument is developed to suggest that the traditional concept of geographic scope should be split into two related, but more precise, elements of international asset dispersion and country environment diversity . Subsequently, these new concepts are tested using a structural equation modeling approach on a sample of 580 large multinational enterprises (MNEs). We find that the relationship between economic performance and international asset dispersion is positive, but that country environment diversity is negatively associated with performance, with a positive interaction between them. This study adds to our theoretical understanding of MNEs, and also provides a bridge between the mixed findings of prior research on multinationality by disentangling the unique effects of the latent subcomponents of geographic scope on firm performance. Copyright © 2003 John Wiley & Sons, Ltd.