Abstract
This paper extends our understanding of the internationalisation and firm performance (I-FP) relationship of service firms by considering the influence of strategic decisions on three types of slack resources. The research focusses on an important type of service operations - global engineering services, which are a major part of the global economy and represent a distinctive business model in the contemporary business environment. In doing so, we theorise the I-FP relationship by addressing the knowledge-intensive, project-based and people-centric features of engineering service firms (ESFs); and test the relationship with a carefully assembled dataset containing 12 years’ data from 242 ESFs. We identify a negative overall I-FP relationship, i.e. ESFs’ international expansion leads to worse financial performance in general. The presence of slack resources explains why such a result exists. Our findings have significant implications, both for future research on internationalisation and performance and for firms to effectively deploy their resources to support global service operations in a strategic manner.
Original language | English |
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Pages (from-to) | 1-48 |
Number of pages | 48 |
Journal | International Business Review |
Early online date | 6 Dec 2017 |
DOIs | |
Publication status | Published - 2018 |
Keywords
- internationalisation-firm performance (I-FP)
- relationship
- strategic resource decisions
- engineering services firms (ESFs)