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Performance and multinationality linked by firm-specific assets

Publish Date: Monday, December 7, 2009

Assistant Professor of International Business and Marketing and Turkish native Ahmet H. Kirca has had a strong presence at The Eli Broad College of Business since he became a faculty member in 2006.

In such a short time, Kirca has played the role of lead researcher for a meta-analysis on the multinationality-performance relationship, as well as on several other research projects sponsored by MSU-CIBER. He has taught several undergraduate and graduate courses in international marketing. He also took an active advisory role during the foundation stage of the International Business Student Organization (IBSO) at MSU.

The multinationality project originated as a class project that spanned two doctoral seminars on international business theory led by Professors Tomas Hult and Tamer Cavusgil at Michigan State University. For this project, Kirca and his team compiled more than 500 articles from top journals that contained the terms "multinationality," "degree of internationalization," or "international diversification." Then, more than 150 empirical articles were selected carefully according to specific criteria and these studies were analyzed using meta-analytic techniques.

An article based on his research entitled "Firm-Specific Assets, Multinationality, and Financial Performance: A Meta-Analytic Review and Theoretical Integration" is forthcoming in the Academy of Management Journal. This study reveals that valuable, intangible firm-specific assets (e.g., R&D and advertising intensity) mediate the relationship between multinationality and performance.

In addition, the results delineate the conditions under which these assets have the strongest impact on the extent to which multinationality relates to performance. Meta-analytic evidence also suggests that multinationality has intrinsic value above and beyond the intangible assets that firms possess after controlling for firms' international experience, age, , and product diversification.

"A large number of studies have looked at a business's ability to expand internationally in international business, management strategy, and marketing disciplines but our meta-analysis takes stock of what is known, answers some persistent questions in the multinationality literature, and point out directions for future research," he said.

Kirca believes that, for all its depth and scope, researchers have only begun to explore the challenges related to international expansion and its performance implications, and this meta-analysis should provide guidance to those intending to pursue research on these important issues.

Kirca learned to speak French, Italian, and English in the Lycee de Galatasaray in Istanbul. In college, he also added Spanish and Japanese to his language inventory. Beginning his career in the tourism industry allowed Kirca to learn about many cultures and become proficient in English, French and Italian. Kirca and his wife decided to cross the pond and join the world of academia in 2000, which eventually led him to his current role at MSU.

Written by Stephanie Goldberg for the International Business Center.