Local, regional, or global? Geographic orientation and relative financial performance of emerging market multinational enterprises

Abstract

Summary We extend the regional/global strategies literature by analyzing the relative performance of emerging market (EM) multinational enterprises (MNEs) based on their geographic orientation. We develop a framework showing that firms adopt three geographic orientations--local, regional, and global--and test our framework with the market penetration strategies (sales) of 701 MNEs from 28 EMs during 2000-2006. Our analysis shows that distinguishing among these three geographic segments is important, as not all of these geographic segments enhance firms' financial performance relative to their industry: a combination of local and global orientations enhances while regional orientation reduces the relative financial performance of EM MNEs.Geographic orientations Regional/global strategies Performance Emerging markets Multinationals