Economies of Scale: The Rationale Behind the Multinationality-Performance Enigma

Abstract In a widely acclaimed contribution to Management International Review, Hennart (2007) challenged one of the mainstream theories Business, S-curve relationship between multinationality and performance, by arguing that there is no positive impact on performance aside from scale enhancing effect resulting increasing multinationality. We examine his arguments analyzing 3876 firms Canada, Germany, Japan, UK US over period 2002 2016. find empirical evidence for direct not convincing. However, leads significantly higher firm via economies scale-channel. Multinationality seems be more important as means increase small home markets compared large domestic markets. Intangible assets appear amplify much than performance. end, it's size matters.