Toward More Effective Research on the Multinationality-Performance Relationship

Abstract

This paper revisits the mainstream academic perspective on the relationship between multinationality and performance (MP). We argue that most, if not all, past empirical work on this international management topic is flawed from a conceptual perspective since there is no valid theoretical rationale that would predict a generalizable MP relationship. We suggest that useful empirical work on the MP linkage requires prior analysis of the key parameters underlying the substance of the multinationality concept in specific empirical settings. We revisit the MP relationship, and elaborate on three key parameters underlying the substance of the multinationality concept: Variety of strategic motivations for FDI, environmental complexity resulting from bundles of discrete FDI decisions, and organizational complexity.