The Impacts of Resources and Diversification on Abnormal Return in Exporters: A Focus on Moderating Effects of Joint Investment

Abstract

Purpose This paper was written to provide an understanding of the effects of internal resources and diversification strategies on abnormal return in exporters. In addition, the moderating effects of joint investment on the relationship between each of the diversification strategies and abnormal return were investigated. Design/Methodology/Approach Based critically on the resource-based theory of firm, this paper reviewed a theoretical framework for abnormal return, internal resources, diversification strategies, and joint investment. This paper also developed an empirically testable model explaining and predicting the relationships among abnormal return, internal resources, diversification strategies, and joint investment. Findings In an exporter, a marketing resource leads positively to product diversification and has an impact on abnormal return. Moreover, in an exporter, an innovation resource has an impact on product and international diversification strategies and thereby abnormal return. With respect to joint investment, this paper found that there is a significant relationship between joint venture membership and abnormal return. Furthermore, joint investment positively moderates the relationship between product and international diversification and abnormal return. Research Implications This paper emphasized the importance of internal resources and diversification strategies on abnormal return in exporters and highlighted the role of joint investment for exporters to create additional value.