Nature of the relationship between international expansion and performance: The case of emerging market firms

Farok J. Contractor, Vikas Kumar, Sumit K. Kundu

Research output: Contribution to journalArticlepeer-review

199 Scopus citations

Abstract

Internationally expanding companies would like to see how they compare with rivals in terms of the effect of internationalization on financial performance (for their sector and their firm). Virtually all such studies have focused on advanced nations. This study, on internationalization of firms based in an emerging economy (India), provides a unique research setting and sheds additional light on this relationship. It tests for the shape of the internationalization-performance curve for emerging market firms, and investigates differences between service firms and manufacturers in the threshold effect between the initial and later stages of internationalization. We find a U-shaped curve depicting the internationalization-performance relationship of Indian firms. Service sector firms tend to gain the positive benefits of internationalization sooner than manufacturing companies.

Original languageEnglish (US)
Pages (from-to)401-417
Number of pages17
JournalJournal of World Business
Volume42
Issue number4
DOIs
StatePublished - Dec 2007

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Finance
  • Marketing

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