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There is a paucity of research that investigates the effect of governance mechanisms on the outcomes of internationalization in emerging market contexts. This paper attempts to addresses the lack of research on the effect of governance mechanisms on the outcomes of internationalization in emerging market contexts and focuses on two unique attributes associated with emerging markets, namely, family ownership and business group affiliation. In order to investigate these phenomena, we utilize an eleven-year longitudinal data set of 2,138 manufacturing firms from an emerging market (India) with a combined total of 17,212 firm-year observations. Specifically, our key finding indicates that a firm that has high levels of family ownership and is affiliated with a business group can change the nature of the underlying U-shaped relationship between internationalization and performance (I-P) to an inverted 'U' relationship. We also find that the threshold at which the change in the shape of the 'U' occurs is very close to the levels at which the owners get considerable control over the firm. Therefore, by integrating corporate governance literature with strategic management and international business literatures, our study represents one of the very few that simultaneously investigate the twin effect of key governance mechanisms (family ownership and business group affiliation) on the I-P relationship by operationalizing ownership in a manner that helps bring out the influence of the institutional context as well. [ABSTRACT FROM AUTHOR]

The debate on whether and how internationalization affects firm performance, despite decades of research remains ambiguous. While some internationalization-performance (I-P) relationship studies have also found the absence of a significant relationship or that firms are better off operating in their domestic markets, the focus of these studies is largely limited to developed markets. In contrast, we conduct our analysis in an important emerging market using an extensive data set of 173,665 observations from 27,388 Indian manufacturing and services firms during the period 1996-2018. We find that depending on the mode of internationalization chosen and the industry context, the internationalization effect on firm performance results in a relationship that is either an 'S'/cubic model or a 'U'/quadratic model. For the entire sample of firms, as well as for a sample exclusively of manufacturing firms, the relationship is an 'S' when firms internationalize through exports and is a 'U' when the mode is foreign investments. For manufacturing firms, we find that the performance during internationalization exceeds prior performance when the mode is exports. For the services industry, the relationship is a 'U' for both exports and foreign investments, implying that services firms are yet to achieve their optimal level of internationalization. We check for the robustness of our results by conducting state of the art statistical tests recommended in the literature for both the cubic model and the quadratic model. [ABSTRACT FROM AUTHOR]

Research on product and geographic diversification is generally carried out in silos with very few studies examining the two strategies simultaneously. Further, virtually all of these studies were focused on developed markets. Our study, based on manufacturing firms from an emerging market (India) analyzes how product diversification types affect the relationship between geographic diversification and firm performance. We find that geographic diversification and performance depict a U-shaped relationship. Interestingly related product diversification shifts the turning point of the 'U' to the left and steepens the curve which we believe indicates that firms with higher related product diversity accrue benefits of internationalization earlier and that related diversification has a synergistic effect on internationalization-performance relationship. In the case of unrelated product diversifiers increasing levels of product diversity flattens the U-shape and at very high levels of product diversity, it results in a flip to an inverted 'U' implying that extreme unrelated product diversifiers have a positive first stage relationship between internationalization and performance but later on net costs take over and the relationship turns negative. [ABSTRACT FROM AUTHOR]