Regional strategies, liability of foreignness, and firm performance

Purpose - This paper seeks to analyze the performance implications of the regional and global strategies pursued by multinational companies. It aims to argue that a firm could experience different performance effects for its intra-and inter-regional operations due to differences in the liability of foreignness between these two levels. Design/methodology/approach - Using a large sample of multinational enterprises (MNEs) drawn from all triad regions during the period 1998-2008, the paper uses panel data methods to analyze the relationships in the sample. Findings - The paper finds significant support for the difference in the effects of intra- and inter-regional operations on performance between firms that operate within their home region and those that venture outside it. Originality/value - This is one of the first papers to examine an impact of regional sales dispersion on MNEs' performance. An exclusion of home country sales from the home region sales is a novel feature of this research.