Patterns of inconsistency: a literature review of empirical studies on the multinationality–performance relationship

Abstract

PurposeThis study aims to understand the performance implications of when a business internationalizes. Many managers take the performance implications of internationalization for granted. Whether seeking a broader customer base or cost reduction through cross-border outsourcing, the overwhelming belief is that internationalization leads to higher profits.Design/methodology/approachThis paper offers a systematic review, content analysis and cross-tabulation analysis of 115 empirical studies from over 40 major journals in management, strategy and international business between 1977 and 2021. Focusing on research settings, sample characteristics, underlying theoretical approaches, measurements of key variables and moderators influencing the multinationality and performance relationship, this study offers a detailed account of definitions and effects.FindingsThe findings of this study suggest a tenuous connection between internationalization and performance. No strain of research literature conclusively identifies a consistent direct path from internationalization to performance. The context specificity of the relationship makes general declarations impossible.Research limitations/implicationsFuture researchers should recognize that internationalization is a process taking different forms, with no specific dominant form. General declarations are misleading. The focus should be on the process of internationalization rather than on the outcome.Originality/valueThis study contributes to the international business literature by exploring reasons for the inconsistent results and lack of consensus. Through a detailed account of definitions and effects, this paper explores the lack of consensus as well as the identified shapes of the relationship.