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International diversification and performance in agri-food firms

Raul Serrano, Marta Fernández-Olmos () and Vicente Pinilla ()
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Marta Fernández-Olmos: Faculty of Economics and Business Studies, Universidad de Zaragoza

Documentos de Trabajo from Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza

Abstract: : This paper studies the relationship between international diversification and performance in agri-food firms In line with the recent literature, it analyses the effects of the degree of internationalization using a uniform sample, a long-term focus and a measure that combines export intensity and regional diversification. The study empirically confirms the hypothesis of a horizontal S-curve relationship between diversification and performance and identifies three phases. Novice export firms are found in the first stage; their profits are low because they incur in the initial costs of exporting. Mature companies with a more advanced internationalization process are in the second stage; they benefit from the positive outcomes of operating at a larger scale. Lastly, the third stage contains internationally over-diversified companies; their performance decreases as a result of costs to enter extra-regional markets, which are especially steep in this sector, and dealing with greater organisational complexity

Keywords: : Agribusiness; International diversification; Firm performance; Degree of Internationalization (search for similar items in EconPapers)
JEL-codes: F23 L66 Q13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cse, nep-eff and nep-int
Date: 2015-01
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Persistent link: http://EconPapers.repec.org/RePEc:zar:wpaper:dt2015-01

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