The Empirics Of Multinationality And Performance

The relationship between a firm's degree of multinationality and its performance is perhaps the most studied relationship in the field of international business. In this paper the author addresses issues concerning the empirical estimation of this relationship. The author argues for greater delineation of the underlying nature of firms' multinationality and points to several statistical issues regarding estimation that appear to need resolution, but which appear to have been largely neglected in the international business literature. Among these are endogeneity of the multinationality construct in the performance relationship and the likelihood that the multinationality-performance relationship is heterogeneous across firms.