A three-stage theory of international expansion: The link between multinationality and performance in the service sector Article

Contractor, FJ, Kundu, SK, Hsu, CC. (2003). A three-stage theory of international expansion: The link between multinationality and performance in the service sector . 34(1), 5-18. 10.1057/palgrave.jibs.8400003



cited authors

  • Contractor, FJ; Kundu, SK; Hsu, CC

fiu authors

abstract

  • It is generally assumed that the performance of a firm improves with greater multinationality. Yet recent empirical studies have shown both a U-shaped relationship (which suggests an initially negative effect of international expansion on performance, before the positive returns of international expansion are realized) and an inverted-U-shaped relationship (which suggests that international expansion beyond an optimal level is again detrimental to performance, and results in a negative slope). This paper proposes a new unified three-stage theory of international expansion that incorporates both concepts in a sigmoid hypothesis. It then tests this on data from 11 service industries, highlighting the difference between knowledge-based and capital-intensive service sectors.

publication date

  • January 1, 2003

Digital Object Identifier (DOI)

start page

  • 5

end page

  • 18

volume

  • 34

issue

  • 1