Firm-Specific Assets, Multinationality, and Financial Performance: A Meta-Analytic Review and Theoretical Integration

Abstract

Drawing upon internalization theory, this study investigates the complex relationships involving firm-specific assets, multinationality, and financial performance. Through a meta-analysis of 120 independent samples reported in 111 studies, we test the predictions of internalization theory in the context of the multinationality-performance relationship. Moreover, we further develop and refine our understanding of internalization theory with a focus on the effects of firm-specific assets on the multinationality-performance relationship. Findings suggest that while advertising intensity fully mediates the relationship between multinationality and performance, R&D intensity has both direct and indirect effects on firm performance. In addition, the results delineate the conditions under which firm-specific assets have the strongest impact on the extent to which multinationality relates to performance. Meta-analytic evidence also suggests that multinationality has intrinsic value above and beyond the intangible assets that firms possess after controlling for firms’ international experience, age, size, and product diversification.