The Performance Implications of Regional Diversification: The Mediating Effect of Expatriation (WITHDRAWN)

Abstract

This study explores how intra- and inter-regional geographic diversification affect the MNE’s management decision on expatriate utilization and how the associated management decision is related to MNE performance. An empirical investigation of Korean MNEs showed that intra-regional diversification negatively relates to the level of expatriate utilization whereas inter-regional diversification is positively associated with intensive use of expatriates. In consistent with previous findings, our results revealed that intra-regional diversification has positive impacts on MNE performance whereas inter-regional diversification presents negative performance outcomes. We further disclosed that intensive use of expatriates, particularly in downstream subsidiaries, negatively affects MNE performance, demonstrating that the level of expatriate utilization mediates the relationship between intra- and inter-regional diversification and MNE performance. This study contributes to a more comprehensive understanding of the implication of firm internationalization by substantiating a notable but rarely tested argument that it is not necessarily the degree of international diversification but the management of multinational organizations that matters to MNE performance.