Multinationality and Firm Performance: The Moderating Role of R&D and Marketing Capabilities
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The
Performance: Role
and of R&D Marketing Capabilities
Moderating
Masaaki Kotabe* TEMPLE UNIVERSITY
SriniS. Srinivasan** DREXEL UNIVERSITY
PreetS. Aulakh*** TEMPLE UNIVERSITY Researchers in international business have long been interested in understanding the relationship between the multinationality of a firm and its market performance. This article contributes to this research stream by incorporating firm heterogeneity in examining the multinationality-performance relationship.
The findings, based on a time series cross-sectional analysis of firms from 12 different industries over a seven-year period, indicate that the impact of multinationality on both financial and operational performance is moderated by firm's R&D and marketing capabilities.
oes multinationality ensure firm
between multinationality and performance in the contemporary environment of global integration has of late generated a flurry of empirical studies (Tallman
performance? This question has been of interest to international business scholars for a long time. The relationship
*MasaakiKotabeholds the WashburnChair of InternationalBusiness and Marketingand is the director of research at the Institute of Global ManagementStudies at the Fox School of Business and Management,Temple University. His research interest includes international marketing,global sourcing strategies, international alliances, and issues related to product and process innovations. His most recent books include GlobalMarketingManagement,2nd ed. (2001) and MarketRevolution in Latin America: Beyond Mexico (2001). **Srini Srinivasan is an Associate Professor at Drexel University, Philadelphia. His research interests include international business, marketing strategy and marketingresearch. ***Preet S. Aulakh is Associate Professor of Strategy and International Business and the Washburn Research Fellow at the Fox School of Business and Management, Temple University. His research focuses on international technology licensing, cross-borderalliance, interorganizationalgovernance, and firm strategies in emerging economies. Partial funding for this research was provided by LeBow College of Business Administration, Drexel University, Philadelphia. JOURNAL OF INTERNATIONALBUSINESSSTUDIES, 33, 1 (FIRST QUARTER2002):
79-97
79
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ANDFIRMPERFORMANCE MULTINATIONALrTY
and Li, 1996; Hitt, Hoskisson and Kim, 1997; Mishra and Gobeli, 1998; Gomez and Ramaswamy, 1999; Geringer, Tallman and Olsen, 2000). That is, increasing market liberalization around the globe, especially in erstwhile-protected economies, has made it easier and sometimes necessary for firms to expand into foreign markets (Aulakh, Kotabe and Teegen, 2000). This liberalization has coincided with economic integration, success of international organizations such as GATT/WTO and UNCTAD, and advances in information and communication technologies. These environmental tr
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