Drivers of New International Firms’ Superior Financial Outcome: A Model for Analysing Market Expansion

Purpose– The objective of the present study was to explain whether the level of the expansion of a new international firm (NIF) has substantial and positive effects on its superior financial performance. In this study, it was investigated whether the firm’s superior financial outcome is affected by firm properties including research and development investment, marketing efforts, and firm size during an international expansion such as exporting and foreign direct investment. Design/methodology/approach–Based principally on relevant research results, an empirically testable model was developed. This model is to analyze the relationship between the level of an NIF’s expansion and its superior financial outcome Findings–The results of this study showed that an NIF’s proactive international expansion eventually has a positive effect on its superior financial outcome even though the effect is negative in the early stage. Thus, NIFs should focus their capacities on R&D and marketing in the stage. Research implications or Originality– Prior studies have analyzed the relationship between a firm’s international engagement and its superior financial performance. Nonetheless, little research has been conducted to determine whether the expansion of a new international firm (NIF) influences financial success. Accordingly, this study provided a model for analyzing what properties NIFs should strengthen during an international expansion