Journal
JOURNAL OF BUSINESS RESEARCH
Volume 59, Issue 4, Pages 501-507Publisher
ELSEVIER SCIENCE INC
DOI: 10.1016/j.jbusres.2005.08.008
Keywords
international diversification; emerging markets; Mexico; firm performance; internationalization
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This study examines the relationship between international diversification strategies and performance in emerging market firms. Using a longitudinal sample of Mexican firms, it finds that there is a U-shaped curvilinear relationship between international diversification and firm performance. Mexican firms initially experience negative performance as they expand internationally due to the liability of foreignness; however, over time, through gaining experience and through organizational learning, they eventually reap the positive benefits from international expansion. Contrary to expectations, our study finds no support for geographic distance as a moderator of the international diversification-performance relationship. Managers of emerging market firms should exercise patience as they initially face challenges to international expansion and should consider expanding to a diverse set of destinations, including those that are more distant. (c) 2005 Elsevier Inc. All rights reserved.
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