Abstract
Previous research has stressed the importance of the relationship between foreign divestment and subsequent firm performance. Yet, controversy remains, as some authors suggest that foreign divestment has a positive effect on firm performance, and others propose that foreign divestment has negative performance effects. To help reconcile this controversy, we first explicate existing arguments and argue that in the context of retail (de-)internationalisation, foreign divestment will have a predominantly negative effect on retailers’ financial performance. We then draw on organisational learning theory to argue that this negative performance effect of foreign divestment is contingent on (a) the spatial dispersion of previously divested foreign operations (i.e. the extent of geographical diversity of the foreign divestments the multinational enterprise [MNE] has conducted over a specified period of time), and (b) the temporal dispersion of previously divested foreign operations (i.e. the time between prior divestment episodes). Drawing on a panel of some of the largest retail MNEs over the 20-year period 1997–2016, we find that foreign divestment has a negative effect on retailers’ subsequent performance. Our results also indicate that the negative performance effect of foreign divestment is effectively mitigated by retailers’ prior divestment experience in spatially diverse and temporally dispersed settings. © 2023 The Authors. British Journal of Management published by John Wiley & Sons Ltd on behalf of British Academy of Management.
Originalsprache | Englisch |
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Fachzeitschrift | British Journal of Management |
DOIs | |
Publikationsstatus | Elektronische Veröffentlichung vor Drucklegung - 15 Dez. 2023 |