A Research Note on Multinationality and Firm Performance: Nonparametric Frontier Analysis

Kevin Grant (Lead / Corresponding author), Roman Matousek, Martin Meyer, Nickolaos Tzeremes

    Research output: Contribution to journalArticle

    1 Citation (Scopus)
    20 Downloads (Pure)

    Abstract

    Purpose: This study provides a fresh insight into the examination of the comparison between multinationality and firm performance, measured through technical efficiency levels by overcoming methodological constraints and misunderstandings presented in earlier research.

    Design/methodology/approach: We estimate firms’ efficiency levels in a production function-type framework through technical efficiency levels using nonparametric data envelopment analysis (DEA). We include firms from both developed and developing economies, from different national origins and with different sectoral characteristics, with a particular focus on knowledge-intensive business services (KIBS) and capital-intensive business services (CIBS).

    Findings: The study confirms for the case of KIBS the existence of the three-stage sigmoid (S-shaped) hypothesis between multinationality and firm performance measured through technical efficiency levels. Finally, the empirical findings reveal that CIBS exhibit only the first two stages, thus forming a ‘U’-shape relationship.

    Originality/value: We propose the application of different firms’ performance measurements, providing us with the ability to unpack a firms’ managerial decision processes with regards to determining the optimised investment(s) in technology and research and development and with a particular focus on knowledge-intensive business services (KIBS) and capital-intensive business services (CIBS).
    Original languageEnglish
    Pages (from-to)1408-1424
    Number of pages17
    JournalInternational Journal of Operations and Production Management
    Volume37
    Issue number10
    Early online date21 Aug 2017
    DOIs
    Publication statusPublished - 2017

    Fingerprint

    Industry
    Data envelopment analysis
    Firm performance
    Business services
    Knowledge-intensive business services
    Technical efficiency
    Multinationality
    Nonparametric frontier
    Frontier analysis
    Managerial decisions
    Developing economies
    Design methodology
    Decision process
    Firm efficiency
    Performance measurement
    Production function

    Keywords

    • management
    • Data envelopment analysis
    • firm
    • perfomance
    • multinationality

    Cite this

    Grant, Kevin ; Matousek, Roman ; Meyer, Martin ; Tzeremes, Nickolaos. / A Research Note on Multinationality and Firm Performance : Nonparametric Frontier Analysis. In: International Journal of Operations and Production Management . 2017 ; Vol. 37, No. 10. pp. 1408-1424.
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    A Research Note on Multinationality and Firm Performance : Nonparametric Frontier Analysis. / Grant, Kevin (Lead / Corresponding author); Matousek, Roman; Meyer, Martin ; Tzeremes, Nickolaos.

    In: International Journal of Operations and Production Management , Vol. 37, No. 10, 2017, p. 1408-1424.

    Research output: Contribution to journalArticle

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    AU - Grant, Kevin

    AU - Matousek, Roman

    AU - Meyer, Martin

    AU - Tzeremes, Nickolaos

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    Y1 - 2017

    N2 - Purpose: This study provides a fresh insight into the examination of the comparison between multinationality and firm performance, measured through technical efficiency levels by overcoming methodological constraints and misunderstandings presented in earlier research.Design/methodology/approach: We estimate firms’ efficiency levels in a production function-type framework through technical efficiency levels using nonparametric data envelopment analysis (DEA). We include firms from both developed and developing economies, from different national origins and with different sectoral characteristics, with a particular focus on knowledge-intensive business services (KIBS) and capital-intensive business services (CIBS).Findings: The study confirms for the case of KIBS the existence of the three-stage sigmoid (S-shaped) hypothesis between multinationality and firm performance measured through technical efficiency levels. Finally, the empirical findings reveal that CIBS exhibit only the first two stages, thus forming a ‘U’-shape relationship.Originality/value: We propose the application of different firms’ performance measurements, providing us with the ability to unpack a firms’ managerial decision processes with regards to determining the optimised investment(s) in technology and research and development and with a particular focus on knowledge-intensive business services (KIBS) and capital-intensive business services (CIBS).

    AB - Purpose: This study provides a fresh insight into the examination of the comparison between multinationality and firm performance, measured through technical efficiency levels by overcoming methodological constraints and misunderstandings presented in earlier research.Design/methodology/approach: We estimate firms’ efficiency levels in a production function-type framework through technical efficiency levels using nonparametric data envelopment analysis (DEA). We include firms from both developed and developing economies, from different national origins and with different sectoral characteristics, with a particular focus on knowledge-intensive business services (KIBS) and capital-intensive business services (CIBS).Findings: The study confirms for the case of KIBS the existence of the three-stage sigmoid (S-shaped) hypothesis between multinationality and firm performance measured through technical efficiency levels. Finally, the empirical findings reveal that CIBS exhibit only the first two stages, thus forming a ‘U’-shape relationship.Originality/value: We propose the application of different firms’ performance measurements, providing us with the ability to unpack a firms’ managerial decision processes with regards to determining the optimised investment(s) in technology and research and development and with a particular focus on knowledge-intensive business services (KIBS) and capital-intensive business services (CIBS).

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