| Summary: | 碩士 === 雲林科技大學 === 企業管理系碩士班 === 97 === There is plenty of evidence to suggest that companies in some parts of the world are increasingly diversifying the geographic scope of their business activities in the pursuit of competitive advantage. Although geographic expansion comes with a set of benefits, different phases of cost may diminish the performance benefits of internationalization. In this study, we extend geographic diversification research to a new context (Taiwanese-based) and tried to explore internationalization-performance relationship at difference expansion phases.
We tested our new theoretical model with a longitudinal data set comprising 214 Taiwanese electronic industries during 2000 to 2007 periods. This sample captured Taiwanese electronic manufacturing substantially involved in internationalization activities and their relationship with performance, which was necessary to discover their different changes in our study. Further, the moderating effect of host countries’ political risk and psychic distance are key variables that should not be underestimated.
Data on 214 Taiwanese firms within 8 years show a horizontal S-shaped relationship between multinationality and performance, which at first showed a performance decline with beginning internationalization, followed by a positive relationship between increasing geographic diversification and firm performance which then declined at very high levels of multinationality. Moreover, firms invest in better political environment countries or higher psychic distance subsidiaries will achieve greater profitability gains from growth in FDI. Our findings and framework highlight temporal dynamics and take the moderating effect of institutional environments into consideration simultaneously.
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