The M Curve and the multinationality-performance relationship of Korean INVs

Purpose – Using data from a sample of new high technology manufacturing start-ups in Korea, the purpose of this paper is to examine the multinationality-performance relationship of international new ventures (INVs) which are born regional in terms of exporting activities. Design/methodology/approach – The paper estimates econometric models as both cubic and quartic fits between the degree of multinationality and firm performance of Korean INVs using a feasible generalized least square (FGLS) regression method. Findings – It is found that the relationship between the INVs' degree of multinationality and firm performance is M-shaped, supporting the augmentation from the traditional S-curve fit applied to multinational enterprises (MNEs). In addition, in terms of performance implications, high technology manufacturing INVs perform better in their home region than in non-home regions when the degree of multinationality is mediocre or becomes very high. Finally, these findings hold for diverse performance measures. Originality/value – This paper assesses if it is really needed to go beyond the S-shaped curve with a sample of INVs, and how much the addition of the fourth degree polynomial term may increase the empirical model's explained variance between the two model specifications.