The Impact of Internationalization and Proprietary Assets on Firm Performance

Abstract

Purpose - To analyse the impact of internationalization and proprietary assets on the performance of Taiwanese high tech firms. \r\nDesign/methodology/approach - Reviews the existing literature on the relationship between internationalization, proprietary assets and firm performance, and develops associated hypotheses. Tests the hypotheses on a sample of companies listed in the electronics and information technologies category on the Taiwan stock exchange, taking into consideration variables of firm performance, internationalization, size leverage and industry effects.\r\n\r\nFindings - Confirms that: Taiwanese high-tech firms demonstrate a higher degree of internationalization compared with Japan; they have higher R&D intensity but lower advertising intensity; they utilize manufacturing technology R&D efforts to realize competitive advantages in original equipment manufacturing and original design manufacturing businesses; a moderate level of internationalization enhances performance, whereas at a higher level it has a negative impact on firm performance; and marketing assets are negatively related to performance.\r\n\r\nResearch limitations/implications - Suggests that future research could employ types of patents as indicators of technological advantages, and could also examine founders` impacts on the relationship between internationalization and performance in high-tech firms during their early years.\r\n\r\nPractical implications - Recommends that firms should take available management resources and governance structures into account when venturing into overseas markets, and should invest more resources towards the creation of R&D assets in order to form core competences to augment firm growth and performance.\r\n\r\nOriginality/value - Extends previous research into the relationship between internationalization and firm performance by focusing on Asian developing countries.