Information Systems Faculty Publications and Presentations
Document Type
Article
Publication Date
12-2011
Abstract
This paper investigates the threads between international diversification and firm performance, resource allocation to R&D and capital expenditure. The context of this study is a resource-based view and transaction costs theory. Firms that are going international, benefit from the resources available to them outside their home country as well as from the utilization of their core competencies in other countries. Regression models without interactive terms indicate that resource allocation significantly impacts firm performance. Capital expenditure is positively associated with return on assets, while research and development expenditure undermines the firm’s performance. Analyses suggest that there is no thorough relation between international diversification and returns, regardless of using asset or sales diversification variables. The estimates of diversification variable are negative and insignificant in most models.
Recommended Citation
Bakay, A., Elkassabgi, A. and Moqbel, M. (2011) ‘Resource Allocation, Level of International Diversification and Firm Performance’, International Journal of Business and Management, 6(12), pp. 87–93. doi: 10.5539/ijbm.v6n12p87.
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.
Publication Title
International Journal of Business and Management
DOI
10.5539/ijbm.v6n12p87