Regional and product diversification and the performance of retail multinationals

Chang Hoon Oh, Timo Sohl and Alan Rugman

Journal of International Management, 2015, vol. 21, issue 3, 220-234

Abstract: Despite the importance of geographic expansion in the services sector, few studies have analyzed the relationships between regional diversification, product diversification and performance for services firms. Here, we focus on experiential learning benefits and managerial complexity to investigate whether and how firms in the retail sector may benefit by expanding their activities within and across regional boundaries. Using panel data of 65 large European retailers from 19 countries for the period between 1997 and 2010, we find that intra-regional diversification has an inverted S-curve relationship and inter-regional diversification has an S-curve relationship with firm performance. Moreover, the results show that product diversification has a negative moderating effect on the relationship between inter-regional diversification and firm performance. Overall, these results add support in the services sector for the three-stage paradigm of international expansion and firm performance.

Keywords: Retail firms; Geographic diversification; Regional diversification; Product diversification; Firm performance; S curve (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (22)

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Working Paper: Regional and Product Diversification and the Performance of Retail Multinationals (2014)
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DOI: 10.1016/j.intman.2015.04.002

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