Regional diversification and firm performance

Gongming Qian, Lee Li, Ji Li and Zhengming Qian
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Gongming Qian: The Chinese University of Hong Kong, Hong Kong, PRC
Lee Li: York University, Canada
Ji Li: Hong Kong Baptist University, Hong Kong
Zhengming Qian: Xiamen University, Xiamen, PRC

Journal of International Business Studies, 2008, vol. 39, issue 2, 197-214

Abstract: This study examines how regional diversification affects firm performance. The results indicate that regional diversification has linear and curvilinear effects on firm performance. Regional diversification enhances firm performance linearly up to a certain threshold, and then its impact becomes negative. The results also show that firms of developed countries maximize their performance when they operate across a moderate number of developed regions and a strictly limited number of developing regions. This explains why internationalization by most international firms is regional rather than global. Journal of International Business Studies (2008) 39, 197–214. doi:10.1057/palgrave.jibs.8400346

Date: 2008
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