The effect of international diversification on innovation performance

This article examines the effect of international diversification on innovation performance. The empirical studies up to now have not found consistent support for the innovation performance from international diversification. We propose there is an inverted S-shaped relationship between international diversification and innovation performance. Innovation performance gets small increase as the firm go abroad to a few similar countries, decreases as the firm entering into some differentiated countries, and finally increase as firms going further into more countries. Data on 73 firms between 2002 and 2012 is collected to do empirical study. The findings of the research provide evidence of the prediction.