Does corporate internationalization impact the firm performance? The moderating effect of internationalization speed and the mediating effect of cost efficiency

DOI: 10.5716/978-981-08-9493-1_IE13

Authors: Chi-Ming Ho, Shu-Tsung Chao, Li-Min Chuang and Chi-Yu Chen

Abstract:

A large volume of literature has been focused on the relationship between internationalization and firm performance in the last three decades. However, there has not been a consistent conclusion. Many scholars have proposed that the organization contingency factors are the critical element that caused the difference in such relationship. Unfortunately, it has never been verified.The purpose of this study is to build a framework of systematic analysis, for reexamining the same relationship from a contextual view. The evidence reveals that: (1) The inconsistence of the purported relationship certainly comes from the cost efficiency and internationalization speed as the intervening variables.(2) The firm’s internationalization through labor cost efficiency improves its performance. In other words, the corporations in Taiwan still use the cheap labor strategy to promote competition advantages. (3) The relationship between internationalization speed and cost efficiency exhibits a U-shape.

Keywords: Firm Performance; Internationalize; Mediating and Moderating Effects; Efficiency.