ARE REGIONAL-ORIENTED COMPANIES BETTER OFF? PERFORMANCE IMPLICATIONS OF HOME-REGION AND HOST-REGION ORIENTED STRATEGIES

Abstract

ABSTRACT The relationship between multinationality and performance can be considered as one of the most important fields in international business and strategy research. However, extant studies argue that the activities of multinational companies are more regional than global. The aim of this paper is to analyze the performance effects of home-region and host region-strategies on firm’s performance. The results indicate that European companies focusing on their home region achieve superior performance. In addition, we find that the relationship between inter-regional strategy and performance has an inverted U-shaped form. Moreover, we examine the moderating role of marketing-related firm-specific advantages on the link between intra-regional strategy and performance. The findings show that these advantages tend to be regional-bound. In particular, companies pursuing an intra-regional strategy can gain higher returns from exploitation of marketing-related firm-specific advantages. Keywords Regionalization, Multinationality, Performance, Firm-specific Advantages, European firms