Geographic scope and multinational enterprise performance
Article first published online: 4 NOV 2003
Copyright © 2003 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 24, Issue 13, pages 1289–1306, December 2003
How to Cite
Goerzen, A. and Beamish, P. W. (2003), Geographic scope and multinational enterprise performance. Strat. Mgmt. J., 24: 1289–1306. doi: 10.1002/smj.357
- Issue published online: 4 NOV 2003
- Article first published online: 4 NOV 2003
- Manuscript Accepted: 27 MAY 2003
- Manuscript Received: 26 JUL 2002
- multinational enterprise;
- geographic scope;
- internalization theory
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.