Internationalization rhythm and innovation performance: The effects of internationalization speed, organizational slack, and competitive intensity

Abstract

While studies show that different internationalization rhythms may result in differing financial performances or cost efficiencies, the relationship between internationalization rhythms and innovation performance remains underexplored. More importantly, the moderating role of speed on this relationship has not been examined, given the limits to how much expansion firms can absorb within a given period without jeopardizing operations and as time compression diseconomies may emerge with high-speed expansion. Here, we apply an absorptive capacity perspective to examine the moderating role of internationalization speed. Unbalanced panel data from Chinese multinational enterprises between 2008 and 2014 reveal a negative relationship between parent companies’ internationalization rhythm and innovation performance, with stronger effects under high internationalization speed. Meanwhile, this relationship weakens (strengthens) with increasing internal organizational slack (external competitive intensity).