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The M Curve and the multinationality-performance relationship of Korean INVs

In Hyeock (Ian) Lee (Department of Management, Quinlan School of Business, Loyola University Chicago, Chicago, Illinois, USA)

Multinational Business Review

ISSN: 1525-383X

Article publication date: 2 September 2013

518

Abstract

Purpose

Using data from a sample of new high technology manufacturing start-ups in Korea, the purpose of this paper is to examine the multinationality-performance relationship of international new ventures (INVs) which are born regional in terms of exporting activities.

Design/methodology/approach

The paper estimates econometric models as both cubic and quartic fits between the degree of multinationality and firm performance of Korean INVs using a feasible generalized least square (FGLS) regression method.

Findings

It is found that the relationship between the INVs' degree of multinationality and firm performance is M-shaped, supporting the augmentation from the traditional S-curve fit applied to multinational enterprises (MNEs). In addition, in terms of performance implications, high technology manufacturing INVs perform better in their home region than in non-home regions when the degree of multinationality is mediocre or becomes very high. Finally, these findings hold for diverse performance measures.

Originality/value

This paper assesses if it is really needed to go beyond the S-shaped curve with a sample of INVs, and how much the addition of the fourth degree polynomial term may increase the empirical model's explained variance between the two model specifications.

Keywords

Acknowledgements

Note: This article is subject to a correction notice. For further information, please see the full text of the article.

The author would like to thank the Editor-in-Chief, Dr Alan M. Rugman, for his support and valuable comments in the development of this research note. The author is also grateful for the helpful comments from the participants in the 2011 Annual Meeting of the Academy of Management (AOM) and Dr Siri Terjesenat from Indiana University and the 2011 Babson College Entrepreneurship Research Conference (BCERC).

Citation

Hyeock (Ian) Lee, I. (2013), "The M Curve and the multinationality-performance relationship of Korean INVs", Multinational Business Review, Vol. 21 No. 3, pp. 214-231. https://doi.org/10.1108/MBR-06-2013-0030

Publisher

:

Emerald Group Publishing Limited

Copyright © 2013, Emerald Group Publishing Limited

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