Intra-regional Sales, Product Diversity, and Performance in Merchandising Multinationals

Nessara Sukpanich and Alan M. Rugman ()
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Nessara Sukpanich: Thammasat University

No 2007-09, Working Papers from Indiana University, Kelley School of Business, Department of Business Economics and Public Policy

Abstract: This study examines the relationships between intra-regional sales, product diversity, and performance of 45 merchandising firms using data from 1997 - 2003. The interaction effects between product diversity and intra-regional sales on performance are explored, using a curvilinear relationship. The analysis integrates three main theories, namely the resource-based view, transaction costs, and organization learning theory. The models measuring a firm’s performance by return on assets (ROA) and return on sales (ROS) show that at high levels of intra-regional sales, small levels of product diversity can generate greater return to a firm but high levels of product diversity may hurt a firm’s performance. Higher levels of intra-regional sales tend to enhance the impact of product diversity on performance. The results are sensitive to the choice of performance measure.

Keywords: intra-regional sales; multinationality and performance; product diversity; merchandising (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse and nep-mkt
Date: 2007
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Forthcoming in Journal of International Management

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