A Regional Perspective on Multinational Expansion Strategies: Reconsidering the Three-stage Paradigm

Authors


  • We thank Alan Rugman, the Special Issue Editor of British Journal of Management, and four anonymous reviewers for their valuable suggestions. This paper is an extension of Oh and Contractor (2012) in the Global Strategy Journal from the balanced perspective of regional multinationals and the three-stage paradigm. We would like to draw the readers' attention to Oh and Contractor (2012) for more information about the sample and data.

Abstract

Empirical studies on international expansion have shown only limited support for the three-stage (S-curve) hypothesis. Whilst the basic concept is intuitively acceptable, the very generality of the paradigm is its weakness in empirical studies. This paper takes a more fine-grained theoretical and empirical approach by distinguishing between the regions covered by different multinational companies. The regional scope covered by a multinational firm makes a substantial difference with regard to its performance. We find that most firms can enhance their performance by focusing on their home region, whilst only a subset of firms operating in both the home and foreign regions show the overall S-curve relationship between multinationality and performance. Certain combinations of product diversification and regional coverage also enhance performance.

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