Which is not true regarding geographic diversification and firm performance?
A)U-shaped relationship at low level of internationalization.
B)Initially a negative effect of international expansion on performance.
C) Inverted-U shape at moderate to high levels of internationalization.
D) Positive only at high levels of internationalization.

Question

Quizplus · Accepted Answer

Studies have shown a positive relationship between geographic diversification and firm performance, but the exact nature of this relationship depends on the level of internationalization. A commonly found pattern is an inverted U-shape, meaning that up to a certain point, international expansion boosts performance, but beyond that point, it becomes detrimental. The point at which the relationship turns negative varies across studies, but it tends to occur at high levels of internationalization. Therefore, statement D is not true as performance does not only become positive at high levels of internationalization.

Which Is Not True Regarding Geographic Diversification and Firm Performance