The M Curve: The Performance of Born-Regional Firms from Korea
利用韩国小型新创企业的国际活动数据，发现国际化程度与企业绩效呈四阶段非线性M形关系，且在本区域内的国际化正向调节该关系。
Abstract: This paper utilizes a new data base on the international activities of small, new ventures in Korea to examine the impact of internationalization on firm performance. Main findings are two-fold: first, the degree of internationalization by new ventures is related to firm performance in a non-linear fashion with four phases resulting in the new M-shaped curve; and, second, the internationalization of the new ventures in the home region of the triad moderates positively the non-linear M-shaped relationship between the two as their degree of internationalization increases. Keywords: M curve, regional strategy, internationalization, performance, new ventures, born regional, Korea. INTRODUCTION There has been a substantial volume of contradictory studies in the international business literature on the international expansion of multinational enterprises (MNEs) and its effects on performance. Some studies suggest a positive linear relationship (e.g., Caves 1971; Grant 1987; Han and Lee 1998), while some work finds a negative linear relationship between the two (e.g., Collins 1990; Michel and Shaked 1986). In addition, a non-linear relationship has been identified between the degree of internationalization and firm performance, such as a U-shaped curve (e.g., Ruigrok and Wagner 2003) and an inverted U-shaped curve (e.g., Geringer, Beamish, and Da Costa 1989; Gomes and Ramaswamy 1999). More recently, there has been strong agreement among international business scholars on the three phases of the internationalization process by MNEs (e.g., Contractor, Kundu, and Hsu 2003; Lu and Beamish 2004; Thomas and Eden 2004; Bae, Park, and Wang 2008; Kudina, Rugman, and Yip 2009). According to them, there is a mismatch between costs and benefits from MNEs' internationalization, which eventually creates a horizontal, S-shaped relationship between the degree of internationalization and firm performance, with three phases. For a summarized discussion on this S-curve hypothesis, see Contractor (2007). There is still an unanswered question in this venue of research: are the three phases of internationalization applicable to small and young firms that internationalize into foreign markets from their inception? Traditionally, the main subject of research in international business has been large, mature MNEs. As such, the validity of the relationship between the degree of internationalization and firm performance has been tested with samples of large MNEs. Since the seminal work by Oviatt and McDougall (1994) on international new ventures, the growing role of entrepreneurial new ventures considered born-global has increasingly become one of the most important phenomena in international business over the past decade (Zahra and George 2002). However, only a handful of articles have examined the empirical link between the degree of internationalization and new venture performance showing a positive linear effect (e.g., Bloodgood, Sapienza, and Almeida 1996; Gleason and Wiggenhorn 2007; Kuivalainen, Sundqvist, and Servais 2007; McDougall and Oviatt 1996; Zahra, Ireland, and Hitt 2000; Zhou 2007). Even fewer researchers have attempted a non-linear effect between the two variables, such as an inverted U-shaped (Hitt, Hoskisson, and Kim 1997) or an S-shaped (Lu and Beamish 2004) relationship. It is argued here that a recent emerging research stream on the regional strategies of MNEs' international expansion provides useful insight on the applicability of the internationalization process to new ventures and their performance. Rugman and his colleagues have consistently demonstrated that most of the world's MNEs expand regionally - not globally - in their home region of the triad (e.g., Collinson and Rugman 2007; Rugman 2005; Rugman andVerbeke 2004). For example, Rugman and Verbeke (2004) and Rugman (2005) showed that over 320 companies on the list of Fortune Global 500 are home-region-oriented MNEs, with only 9 companies classified as global MNEs. …