Causal analysis of the internationalization and performance relationship based on neural networks - advocating the transnational structure

Jan Nicolas Garbe, Nicole Franziska Richter

    Research output: Contribution to journalArticleResearchpeer-review

    19 Citations (Scopus)

    Abstract

    Although the impact of internationalization on firm performance is still controversial, we find that internationalization does not have an ongoing positive performance effect. The international expansion of MNEs needs to be managed carefully, especially after a certain level of international involvement is surpassed. One theoretically highly accepted, but empirically neglected, driver of the success of international business is the establishment of an appropriate international organizational structure. This paper is the first to empirically address the question of how international organizational structure decisions affect performance by means of a new analysis technique - a causal analysis based on neural networks. Referring to UNCTAD's 100 most international corporations, the key finding of this study is that successful high internationalization involves a transnational structure in which elements of centralization and decentralization are well balanced. © 2009 Elsevier Inc. All rights reserved.
    Original languageEnglish
    Pages (from-to)413-431
    JournalJournal of International Management
    Volume15
    Issue number4
    DOIs
    Publication statusPublished - 1 Dec 2009

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