Does country matter?

Shige Makino, Takehiko Isobe, Christine M. Chan

Research output: Contribution to journalArticle

292 Citations (Scopus)

Abstract

Previous studies have explored the predictors of business unit performance in multiple-business firms and investigated the extent of the effect of industry, corporate, and business unit on the performance of a business unit. These studies have focused almost exclusively on examining performance differences within a single country, thus treating country effects as external to business unit performance. In contrast, this study focuses on multinational corporations and examines the extent to which country effects explain the variation in the performance of foreign affiliates. Our findings show that country effects are as strong as industry effects, following affiliate effects and corporate effects. Our results also suggest that corporate and affiliate effects tend to be more critical in explaining the variation in foreign affiliate performance in developed countries, whereas country and industry effects are more salient in developing countries.

Original languageEnglish
Pages (from-to)1027-1043
Number of pages17
JournalStrategic Management Journal
Volume25
Issue number10
DOIs
Publication statusPublished - 2004 Oct 1
Externally publishedYes

Keywords

  • Corporate strategy
  • Country effect
  • Foreign affiliate performance
  • International diversification

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management

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