A Tale of Two Concepts [Elektronisk resurs] Exploring the Relationship between Firm Performance and Multinationality

• Despite being a pivotal topic over the past 50 years, the benefits and costs of internationalization are not well understood. A substantial body of research in international business, strategy, and general management is devoted to understanding firm internationalization and its connection to a firm’s financial performance; however, results are inconclusive. This thesis explores firm performance in relation to internationalization processes and, consequently, a firm’s degree of multinationality. The aim is to critically assess the extant literature, evaluate prevailing underlying assumptions, and investigate the causal direction between the two key concepts: firm performance and multinationality. A sequential, multiphase research approach divides the research process into three consecutive phases – exploratory, confirmatory, and explicatory – allowing for a combination of methods, including a systematic literature review, fixed effects logistic regression on 13 years of unbalanced panel data, curvilinear OLS regression on panel data, and content analysis of pilot case studies. Together, this provides a holistic response to the research question: What role does firm performance play in relation to multinationality? Findings reveal a paradigmatic bias in previous research, where authors propagate the ubiquitous causal assumption that multinationality affects firm performance. Instead, this thesis finds solid statistical support for a reversed causal relationship – firm performance drives multinationality. The theoretical arguments are derived from behavioral theories, including the resource-based view, the internationalization process model, and prospect theory. This thesis bridges organizational-level with individual-level theories, contributing to the discussion on managerial decision-making in the internationalization process. 

Ämnesord

Social Sciences  (hsv)

Economics and Business  (hsv)

Business Administration  (hsv)

Samhällsvetenskap  (hsv)

Ekonomi och näringsliv  (hsv)

Företagsekonomi  (hsv)

Business Studies  (uu)

Företagsekonomi  (uu)

Genre

government publication  (marcgt)

Indexterm och SAB-rubrik

multinationality

firm performance

paradigmatic bias

performance-multinationality relationship

resource-based view

prospect theory

internationalization process model