Globalization of Insurance Companies: A Blessing or a Curse?
Journal
European Journal of International Management
ISSN
1751-6757
Type
journal article
Date Issued
2021
Author(s)
Abstract
A central debate in international business is whether there is a relationship between internationalisation and firm performance, and if so, what its shape and contingent factors are. We use a sample of European insurance companies to show that industry context and cost efficiency are contingent factors of this relationship. Life insurers, particularly those focusing on cost leadership, exhibit a negative impact of globalisation (G) on firm performance (P). We proxy cost leadership by a novel multidimensional measure of cost efficiency and show that it negatively moderates the G-P relationship in the life insurance industry. In contrast, there is no significant G-P relationship and no cost efficiency moderating effect in the nonlife insurance industry. We attribute these results to the higher liability of foreignness driven by greater distance in the globalisation process and by the greater importance of cost efficiency in life insurance as opposed to nonlife insurance.
Language
English
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Inderscience
Volume
15
Number
2/3
Start page
457
End page
483
Subject(s)
Division(s)
Eprints ID
259480