The Effect of Global Orientation on the Performance of International New Ventures. Evidence from Italy

The aim of this paper is to investigate the relationship between global versus regional orientation and the performance of international new ventures (INVs). Building on internalization theory and organizational learning literature, we develop two competing hypotheses on the performance effect of geographic scope on INV performance. We test these hypotheses on a sample of Italian manufacturing INVs. The study extends the regionalization/globalization debate to the context of INVs. Our findings show that INVs mainly operate on a regional, rather than global basis. However, when they succeed in achieving a global reach, the effect on profitability is positive and significant, supporting the hypothesis that global orientation improves firm performance.