Session 140

Global Diversification and Firm Performance

Track G

Date: Tuesday, October 13, 2009

 

Time: 10:00 – 11:15

Paper

Room: Meeting Room 16


Session Chair:
Andrew Delios, National University of Singapore

Title: How Does Export Commitment and Product Diversification Jointly Affect the International Scope-Firm Performance Relationship?

Authors

  • Asli Colpan, Kyoto University
  • Andrew Delios, National University of Singapore
  • Takashi Hikino, Kyoto University

Abstract: In analyzing the panel data of Japanese electronics enterprises from the early 1990s to 2002, our research clarifies the moderating influences of export activities and product diversity on the relationships between international investment and financial performance. The exploration of the interactions between those strategic directions led us to the conclusion that the expected inverted U-curve performance impact of international investment actually changes, depending upon the extent of both a firm’s export commitment and product diversity. The examination of the interactive effects of three predictors brought about a comprehensive picture of the combined effects of diversification strategies on financial performance. Especially intriguing is the case of diversified companies with accumulated capabilities that enable them to stabilize profitability in their integration of international investment and export activities.

Title: Performance, Diversity, and Multiplicity of Foreign Cross-Listing Environments

Authors

  • Elitsa Banalieva, Northeastern University
  • Christopher Robertson, Northeastern University

Abstract: The purpose of this study is to examine an underrepresented area in the international strategy literature: multinational enterprises’ (MNEs) portfolios of foreign cross-listings and their effects on firm performance. Most international diversification research has focused on the international scope of MNEs’ productive assets. We develop a theoretical framework, which analyzes the interaction between multiplicity (the number of foreign stock exchanges) and diversity (the modified Berry-Herfindahl ratio of countries’ institutional environments) of MNEs’ foreign cross-listings. Furthermore, we examine a central research question that links the interaction effect of multiplicity and diversity on MNEs’ performance (ROA). Preliminary results from a sample of 102 French MNEs suggests that firms that maintain portfolios of too diverse cross-listing environments exhibit inferior performance to those that are focused on more similar cross-listing environments, as the number of foreign cross-listings increases.

Title: Schumpeterian Rent vs. Ricardian Rent: Interpreting International Diversification and Product Diversification in China

Authors

  • Li Sun, University of Missouri-Kansas City
  • Mike Peng, University of Texas at Dallas
  • Weiqiang Tan, City University of Hong Kong

Abstract: The core of resource-based theory views strategy as a “continuing search for rent”. Rents can be broadly grouped into Schumpeterian rents and Ricardo rents. However, there are still some unexplored questions: (1) What the creation and extracting mechanism behind Schumpeterian rents? (2) Can Ricardian rents transfer to Schumpeterian rents? (3) Can Schumpeterian rents trigger Ricardian rents? In the context of globalization, we try to indentify the dynamics of strategic choices of international and product diversification under the globalization. We interpret Chinese firms’ international diversification process as endeavors to extract Schumpeterian rents, and their product diversification process as efforts to exploiting Ricardian rents. Empirical data of Chinese listed firms from 2001 to 2006 supports our main arguments: (1) international diversification and firm performance have two-way causation relationship, but product diversification and firm performance do not; (2) international diversification and product diversification can be substituted and complemented each other.

Title: Strategic Modularization and Performance Implications in the Global Automobile Industry

Authors

  • Ronaldo Parente, Florida International University

Abstract: Our paper focuses on how global automobile manufacturers benefit from the implementation of strategic modularization. A theoretical framework is developed and tested examining the process of how strategic modularization impact firm’s performance in the context of the Brazilian automobile industry. Data was collect over a 5 year period in three stages. Preliminary data analysis suggest that strategic modularization may help improve a firm’s positional advantage through the development of capabilities such as technology transfer, entrepreneurial strategic intent, and face-to-face communication. In addition, the adoption of strategic modularization seems to influences the nature of relationships with major suppliers, further blurring the boundaries of the firm.

All Sessions in Track G...

Sun: 10:00 – 11:30
Session 270: Globalizing the Young Venture: A Conversation with Four High Tech CEOs
Sun: 13:00 – 14:30
Session 271: The Duke Offshoring Research Network Project: Implications for Research and Practice
Sun: 15:00 – 16:30
Session 272: Location, Knowledge, and Competitive Dynamics: New Research Directions
Sun: 16:30 – 17:30
Session 311: Global Strategy, IG Meeting
Mon: 12:45 – 14:00
Session 138: Doing Business in China
Mon: 15:45 – 17:00
Session 139: Offshoring & Outsourcing
Mon: 17:15 – 18:30
Session 142: Liability of Foreignness
Tue: 10:00 – 11:15
Session 140: Global Diversification and Firm Performance
Tue: 11:30 – 12:45
Session 145: Institutions and Governance in an Uncertain World
Tue: 14:30 – 15:45
Session 141: Entry Strategy & Location Choice
Session 143: Managing MNC Subsidiaries: Innovation, Control and Subsidiary Initiatives
Wed: 10:00 – 11:15
Session 146: Global Knowledge Search
Wed: 11:30 – 12:45
Session 147: Internationalizing the Firm: Institutions, Emerging Markets and Performance Considerations


Strategic Management Society

Washington DC