Multinationality-Performance Relationship in Russian MNEs: The Moderating Effect of Contingencies

Abstract

We use Casson's (1999) concept of (increasing) transaction and information costs adding to organizational complexity and expenditures, to arrive at an S-shaped relationship between degree of internationalization (DOI) and performance. To capture contextual complexity, we consider critical boundary conditions for the relationship DOI performance of Russian firms, namely 1) the impact of environmental uncertainty, 2) firmlevel characteristics such as firm size and innovativeness and 3) the generic strategy followed by the Russian MNEs. We use a sample of 213 predominantly private and mature Russian MNEs. Our results show support for hypothesized S-shaped relationship; this relationship is conditional on the Russian firms' degree of innovativeness and differentiation strategy. Environmental dynamics and firm size affect performance of internationalizing Russian firms to a lesser extent.