How Industry Dynamics Influence the Internationalization-Performance Relationship: Evidence From TechnologyIntensive Firms

The relationship between internationalization and performance has been the topic of a significant number of research studies, which report a mixed pattern of findings. However, the incorporation of global industry characteristics in the testing of this relationship has not been a facet of these studies. This article investigates the impact of intrafirm trade and differential market growth of the industry on the relationship between internationalization and performance. It focuses on technology-intensive industries using a sample of 795 firms drawn from five countries. Findings indicate that internationalization has a positive relationship (which is quadratic in nature) with performance. Intrafirm trade and differential growth rates were found to interact with the relationship between internationalization and performance, thereby indicating the benefits of internationalization to be contingent on global industry characteristics. (C) 2012 Wiley Periodicals, Inc.