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Degree of Internationalization and Firm Financial Performance
| Content Provider | Scilit |
|---|---|
| Author | Ismiyanti, F. |
| Copyright Year | 2018 |
| Description | Previous empirical results on the relationship between internationalization and firm performance have been mixed. Both linear and non-linear relationships have been reported. The linear analysis that was used by previous studies shows different results. Most recent studies are focused on nonlinear analysis to describe the relationship between internationalization and firm performance. This paper focuses on analyzing the relationship between Degree of Internationalization (DOI), measured by Foreign Sales to Total Sales (FSTS) ratio, and firm performance, measured by return on asset, return on equity, net profit margin and total assets turnover. Ordinary least square multiple regression and a curvilinear regression model were used to test the hypothesis. The result shows that the relationship between internationalization and firm performance is more significant in curvilinear regression analysis.This chapter focuses on analyzing the relationship between Degree of Internationalization, measured by Foreign Sales to Total Sales ratio, and firm performance, measured by return on asset, return on equity, net profit margin and total assets turnover. In order to enhance their scope of activity, companies tend to make decisions to internationalize as one of their strategies. This refers to income rate or operations located outside their country of origin. The decreasing performance when the value of international expansion is high is caused by the corporate decision to expand higher than its optimum potential. The pattern of the relationship between internationalization and performance is illustrated as the U-curve in the nonlinear analysis. Corporate business activity is categorized in three main actions: budgeting, investing and operation. Global business improvement influences domestic business behavior, generating cooperation programs between local and foreign companies, which induces direct and indirect investments, both to and from Indonesia. Book Name: Increasing Management Relevance and Competitiveness |
| Related Links | https://content.taylorfrancis.com/books/download?dac=C2017-0-61685-1&isbn=9781351241892&format=googlePreviewPdf |
| Ending Page | 383 |
| Page Count | 3 |
| Starting Page | 381 |
| DOI | 10.1201/9781351241892-71 |
| Language | English |
| Publisher | Informa UK Limited |
| Publisher Date | 2018-04-17 |
| Access Restriction | Open |
| Subject Keyword | Book Name: Increasing Management Relevance and Competitiveness Social Sciences, Interdisciplinary Behavior Firm Performance Nonlinear Analysis Degree Make Decisions Relationship Between Internationalization |
| Content Type | Text |
| Resource Type | Chapter |
