The theoretical rationale for a multinationality-performance relationshipReport as inadecuate

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Management International Review

, Volume 47, Issue 3, pp 423–452

Received: 15 June 2005Revised: 15 February 2006Accepted: 15 April 2006


Abstract and Key ResultsThis paper reviews the theoretical rationale that has been advanced so far for a positive relationship between multinationality i.e. international diversification and performance.

We show that transaction cost-internalization theory implies no direct and general relationship between international diversification and performance.

Key WordsMultinationality International Diversification Performance Transaction Cost Theory Scale Economies Flexibility Learning  Download to read the full article text

Author: Jean-François Hennart



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