Sohl, TimoTimoSohlVroom, GovertGovertVroomRudolph, ThomasThomasRudolph2023-04-132023-04-132012-10-06https://www.alexandria.unisg.ch/handle/20.500.14171/90899Drawing on the resource-based view and transaction cost economics, this study investigates the benefits and costs that might drive the dynamic relationship between an established multinational enterprise's (MNE) diversification into emerging markets and its firm performance. Using an unique dataset of the leading MNEs from the global retailing industry over thirteen years (from 1997 to 2009), we find a persistent inverted U-shaped relationship between diversification into emerging markets and profits. Thus, established MNEs that focus more intensively on a few emerging markets are able to outperform rivals that either decided not to diversify into emerging markets, were reluctant to commit sufficient resources to emerging markets, or diversified intensively into many emerging markets. However, when MNEs market a focused product portfolio, they are able to benefit by diversifying more intensively into various emerging markets. The study concludes with a discussion of established theoretical arguments in the context of emerging markets.enGeographical diversificationEmerging MarketsFirm PerformanceDynamic Panal Data Modelconference paper