A Contingency Theory of Internationalization-Performance for Emerging Market Multinational Enterprises

Management International Review, Forthcoming

Posted: 16 Jan 2011 Last revised: 3 Dec 2012

See all articles by Elitsa R. Banalieva

Elitsa R. Banalieva

Northeastern University; Northeastern University - International Business & Strategy

Ravi Sarathy

Northeastern University - International Business & Strategy

Date Written: January 13, 2011

Abstract

Studies of the internationalization-performance (I-P) relationship for emerging market multinational enterprises (EM MNEs) have yielded mixed results, suggesting that a contingency view of I-P for EM MNEs may be useful and timely. In particular, we suggest it is useful to analyze how the EMs’ trade liberalization can amplify or reduce the performance from foreign market penetration in the context of electronics vs. non-electronics EM MNEs.

Our framework suggests the I-P link is inverted-U shaped for electronics EM MNEs and linear for non-electronics EM MNEs. These relationships are further enhanced with higher trade liberalization. Our empirical tests with seven related measures of trade liberalization on a sample of 623 MNEs from 14 EMs for 2000-2006 largely support our theory.

Our article integrates and contributes to two small, growing, and related literatures: (1) the I-P relationship for EM MNEs per se; and (2) the effect of trade liberalization on firms’ internationalization. We conclude with fresh implications for theory, policy, and practice.

Keywords: Contingency Theory, Multi-Stage Theory of Internationalization, EM MNEs, Internationalization, Trade Liberalization, Performance, Electronics Industry

Suggested Citation

Banalieva, Elitsa R. and Sarathy, Ravi, A Contingency Theory of Internationalization-Performance for Emerging Market Multinational Enterprises (January 13, 2011). Management International Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1740162

Elitsa R. Banalieva (Contact Author)

Northeastern University ( email )

360 Huntington Ave
315 C Hayden Hall
Boston, MA 02115
United States

Northeastern University - International Business & Strategy ( email )

Boston, MA 02115
United States

Ravi Sarathy

Northeastern University - International Business & Strategy ( email )

Boston, MA 02115
United States

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