Internationalization and performance: An analysis of Indian firms
Description
This paper explores the nature of the relationship between a firm’s internationalization and performance (I–P), and provides evidence on the moderating role of firm characteristics in shaping this relationship. First, the paper investigates two modes of internationalization: exports and foreign direct investment (FDI). The study anticipates that the I–P relationship differs across these modes due to variations in market-seeking and strategic asset- or resource-seeking motivations among internationalizing Indian firms. Drawing on these distinct motivations, the study theorizes a positive linear I–P relationship with export intensity and a negative linear I–P relationship with FDI activity, finding strong support for the latter. Second, the study emphasizes the contextual nature of the I–P relationship and integrates the role of organizational characteristics—such as business group affiliation, firm size, and firm age—in shaping this relationship. The findings indicate that business group affiliation and firm age positively moderate the I–P relationship, highlighting deeper institutional, resource-based, and legitimizing effects. These results underscore the need for more mid-range theorizing to develop a robust understanding of how various organizational characteristics influence the I–P relationship.
Copyright Date
January 2010
Publication Date
1-1-2010
Keywords
Business firm, Internationalization, Organizational performance, Firm's performance, Institutional context, Business group
Conference
Strategic Management Society Research Workshop, 10-12 December, 2010, IIM Bangalore
