GEOGRAPHIC DIVERSIFICATION AND FIRM PERFORMANCE: A STUDY OF INDONESIAN MULTINATIONAL ENTERPRISES
Abstract Geographical diversification is a rare occurrence in Indonesia. Firms may have grown accustomed to the era prior to international trade liberalization and are therefore, home market-oriented. Using the data of 56 Indonesian multinational enterprises (MNEs) over the period of 2013 to 2019, t...
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| Format: | Final Project |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/52612 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | Abstract Geographical diversification is a rare occurrence in Indonesia. Firms may have grown accustomed to the era prior to international trade liberalization and are therefore, home market-oriented. Using the data of 56 Indonesian multinational enterprises (MNEs) over the period of 2013 to 2019, this paper examines the impact of geographical diversification on firm performance. Contrary to expectations, the findings infer that geographically focused MNEs realize superior performance over geographically diversified MNEs. Low international experience, inefficient investments and costs relating to governance are the proposed causes of this result. Control measures were also included in this study; firm size and leverage significantly impacts firm performance however age does not. |
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