Edited by Mélanie E. Hassett and Eriikka Paavilainen-Mäntymäki
Chapter 2: Using quantitative longitudinal data to analyse the relationship between firms' internationalization and performance
Although researchers have been trying to investigate the internationalization–performance relationship for more than 40 years, due to heterogeneous results their results are still, at best, inconclusive. One assumed reason for the heterogeneous results is the neglect of the process character of internationalization in most of the studies (Glaumand Oesterle 2007; Oesterle and Richta 2013). On the one hand the idea that internationalization is a process is anything but new (e.g. Vernon 1966; Johanson and Vahlne 1977; Luostarinen 1979) and recent research also concludes that ‘internationalization processes still matter – perhaps even more so today’ (Barkema and Drogendijk 2007, p. 1144). On the other hand most of the numerous previous studies on the internationalization–performance relationship are based on cross-sectional data, or data including only short time intervals (Oesterle and Richta 2013). Given the restricted time horizon, the findings of the existing studies concern only the relationship between the static degree of internationalization and firm performance, but do not answer the question as to whether this relationship is stable over time (Gomes and Ramaswamy 1999; Kotabe et al.2002). However, it is reasonable to regard the relationship as unstable overtime, since both internal factors of the firm and the firm’s macroeconomic environment may change (Grant 1987; Geringer et al. 2000; Fisch and Oesterle 2003). Furthermore, the static approach does not take into account that there might be effects, such as organizational learning during the internationalization process, that also influence firms’ performance.
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