Rapid Internationalization of Emerging Market Business: Evidence from Asian Emerging Market Multinational Enterprises

Abstract

The purpose of this study is to provide an integrated framework that conceptualizes multifaceted antecedents pertaining to international expansion of emerging market businesses in relation to firm performance. This paper develops multiple-item measures of multiple-dimensions to clarify how internationalization path and geographic scope affect emerging market MNEs performance in a sample of 115 Asia Pacific MNEs over the period 2002–2006. The result shows that the relationship between internationalization and firm performance is a nonlinear relationship. There will be a negative relationship between internationalization and performance in the first and the third stages, and a positive relationship in the second stage. The empirical results also show that Asia Pacific MNEs international expansion paths have significant differences between intra-regional markets and extra-region and global markets.

Keywords

Asia-Pacific MNEs Theory of International Expansion Internationalization Emerging Market Business

Get full access to this article

View all access options for this article.

References

Collins

J. M.

(1990), “A market performance comparison of U.S. firms active in domestic, developed and developing countries”, Journal of International Business Studies, Vol. 21, pp. 271–287.

Contractor

F. J.

Kundu

S. K.

Hsu

C. C.

(2003), “A three-stage theory of expansion of international expansion: the link between multinationality and performance in the service sector”, Journal of International Business Studies, Vol. 34 (1), pp. 5–18.

Daniels

J. D.

Bracker

(1989), “Profit performance: Do foreign operations make a difference?”, Management International Review, Vol. 29, pp. 46–56.

Dunning

J. H.

(1995), “Multinational Enterprises and the Global Economy”, Addison-Wesley: Wokingham.

Friedman

J. H.

(1991), “Multivariate adaptive regression splines”, Annals of statistics, Vol. 19, pp. 1–50.

Geringer

J. M.

Beamish

P. W.

Costa

R. C.

(1989), “Diversification strategy and internationalization: implications for MNE performance”, Strategic Management Journal, Vol. 10, pp. 109–119.

Gomes

Ramaswamy

(1999), “An Empirical Examination of the Form of the Relationship between Internationalization and Performance”, Journal of International Business Studies, Vol. 30, pp. 173–188.

Gongming

(1998), “Determinants of profit performance for the largest US firms 1981–92”, Multinational Business Review, Vol. 6 (2), pp. 44–51.

Grant

R. M.

Jammine

Thomas

(1988), “Diversity, diversification, and profitability among British manufacturing companies, 1972–84”, Academy of Management Journal, Vol. 31, pp. 71–801.

10.

Guillen

M. F.

(2000) “Business groups in emerging economies: a resource-based view”, Academy of Management Journal, Vol. 43 (3), pp. 362–80.

11.

Hitt

M. A.

Hoskisson

R. E.

Kim

(1997), “International diversification: Effects on innovation and firm performance in product diversified firms', Academy of Management Journal, Vol. 40, pp. 767–798.

12.

Johanson

Vahlne

J. E.

(1977), “The internationalization process of the firm: A model of market knowledge and increasing foreign market commitments”, Journal of International Business Studies, Vol. 8, pp. 23–32.

13.

Khanna

Rivkin

J. W.

(2001), “Estimating the performance effects of business groups in emerging markets”, Strategic Management Journal, Vol. 22 (1), pp. 45–74.

14.

Nachum

(2004), “Geographic and Industrial Diversification of Developing Country Firms”, Journal of Management Studies, Vol. 41 (2), pp. 274–294.

15.

Porter

M. E.

(1985), “Competitive Advantage: Creating and Sustaining Superior Performance”, the Free Press: New York.

16.

Rugman

A. M.

Brain

(2003), “Multinational enterprises are regional, not global”, Multinational Business Review, Vol. 11 (1), pp. 3–12.

17.

Ruigrok

Wagner

(2003), ‘Internationalization and performance: an organizational learning perspective’, Management International Review, Vol. 43 (1), pp. 61–84.

18.

Singh , (1995), “A. Corporate Financing Patterns in Industrializing Economies, International Finance Corporation”, Technical Paper 2, Washington D. C.

19.

Sullivan

(1994), “Measuring the Degree of Internationalization of a Firm”, Journal of International Business Studies, Vol. 25, pp. 325–342.

20.

Tolentino

P. E. E.

(1993), “Technological Innovation and Third World Multinationals”, New York: Routledge.

21.

Vernon

(1971), “Sovereignty at bay: the multinational spread of U.S. enterprises”, Basic Books: New York.

22.

Young

Peng

M. W.

Ahlstrom

Bruton

(2002), “Governing the corporation in emerging economies: a principal-principal agency perspective”, Academy of Management, Vol. 39, pp. 107–123.