Engaging the debate regarding the appropriate level of geographic diversification for multinational enterprises (MNEs), we examine a critical, yet unresolved, question: How is performance impacted by the MNE's level of intra-and inter-regional diversification versus the total level of geographic diversification? Using data from 123 U.S.-based MNEs over a seven-year period and leveraging both sales-based and subsidiary-based measures for diversification, we find that performance increases at an increasingly higher rate as firms concentrate more heavily on intra-regional diversification. Regarding inter-regional diversification and total geographic diversification, we find inverted-U relationships to exist between firm performance and the level of geographic diversification. Different from recent research on multinationality, our robustness checks indicate no evidence of a sigmoidal relationship between the degree of regional diversification and performance.

This study examines how regional diversification affects firm performance. The results indicate that regional diversification has linear and curvilinear effects on firm performance. Regional diversification enhances firm performance linearly up to a certain threshold, and then its impact becomes negative. The results also show that firms of developed countries maximize their performance when they operate across a moderate number of developed regions and a strictly limited number of developing regions. This explains why internationalization by most international firms is regional rather than global. Journal of International Business Studies (2008) 39, 197–214. doi:10.1057/palgrave.jibs.8400346

Purpose -The purpose of this paper is to investigate the early internationalization and the performance of small firms in technology-intensive industries. Design/methodology/approach -Using a sample of 278 small US firms in technology-intensive industries, this paper employs quantitative methodologies to test hypotheses. Findings -The findings indicate that such organizational variables as firm size and international experience have a non-linear, inverted U-shaped relationship with these firms' early internationalization. Some strategic variables, such as R&D intensity, have significant impacts, whereas others, such as advertising intensity and strategic alliances, have none. However, the interactions between these strategic variables have a more significant influence upon these firms' early internationalization than do the individual strategic variables in isolation. Moreover, early internationalization has significant and positive impacts on the performance of these firms. Practical implications -The paper's findings have important managerial implications. The paper identifies the driving forces for the early globalization of small firms and provides useful guidelines for managers to manage these factors in their efforts to maximize firm performance. Originality/value -The paper differentiates organizational factors from strategic factors against the background of small "born globals" in technology industries and investigates the interactions among these internal factors and external factors, i.e. the environments of technology industries. Findings of non-linear relationships among these factors shed light on the strategy determinants of a unique group of small to medium-sized enterprises and their performance.

In recent years many small, young firms have started internationalizing early and have become ‘born globals’ (BGs). This study traces the phenomenon to five individual‐level and company‐level antecedents, including propensity to act, risk tolerance, company‐level organization of knowledge, ability to forge company‐level consensus, and company‐level responsiveness to new environments. Individual‐level antecedents are entrepreneurs' psychological qualities and company‐level antecedents are organizational behaviors. While these antecedents may or may not individually contribute to the rapid internationalization of small BGs, their interaction significantly speeds up the process. Evidence collected in this study demonstrates that the interaction among these antecedents is a complex mechanism. The interaction can be moderation, mediation, and even mediated moderation. The complex interaction of these antecedents explains the fast internationalization of BGs. The evidence sheds light on the relationships between entrepreneurs' psychological qualities and organizational behaviors.