Transnational Strategy and the Creation of Shareholder Value: Any Correlation?

Empirical evidence suggests that companies tend to employ four generic strategies to enter and exploit foreign markets: an international, multidomestic, global, or transnational strategy (Hill, 1999). Of the four, Bartlett and Ghoshal (1989) argue that in a world characterized by globalization, there are forces driving a growing number of firms to embrace the transnational alternative. The research undertaken here examines the extent to which pursuing a transnational strategy contributes to a firm's ability to create value for its shareholders, and at whether being more or less transnational might influences the rate of growth in shareholder value. For purposes of this analysis, a firm's strategic profile was defined in terms of its transnationality and internationality indices.This paper was presented at the 18th International Conference of the International Trade and Finance Association, meeting at Universidade Nova de Lisboa, Lisbon, Portugal, on May 23, 2008.