Title: Performance effects of multinationality: evidence from European companies

Authors: Arkadiusz Ral-Trebacz

Addresses: Chair for International Management, International Institute Zittau, Central Academic Unit of Dresden University of Technology, Markt 23, 02763 Zittau, Germany

Abstract: The relationship between multinationality and performance is a relevant research field in international business. The most prominent theoretical paradigm to describe this relation can be derived from the three-stage theory of international expansion, which was developed with regard to US companies. Therefore, it may be questionable if the three-stage approach is also applicable for firms from other countries, e.g. from Europe. We find that the multinationality-performance relationship is contingent upon some characteristics of the home region, in which a company has its headquarters. Furthermore, we show that the multinationality effect differs with regard to the performance measurement: while employing a financial performance indicator we find an inverted S-shaped relationship; for the market-based performance proxy, the link between multinationality and performance has an inverted U-shaped form. In addition, greater investments in marketing-related intangible assets can help companies to reduce the liabilities of being new and foreign, consequently leading to superior performance.

Keywords: multinationality; firm performance; Europe; intangible assets; internationalisation; theory of international expansion; performance measurement; financial performance; market-based performance; multinational corporations; MNCs.

DOI: 10.1504/EJIM.2016.079528

European Journal of International Management, 2016 Vol.10 No.6, pp.698 - 724

Received: 05 Feb 2015
Accepted: 25 Jun 2015
Published online: 30 Sep 2016 *

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