Internationalization, Regional Diversification and Firm Performance: The Moderating Effects of Administrative Intensity
Wei-Hwa Pan, Wei-Chun Tsai

Abstract
Recent research on the internationalization of firm gives little attention to the distinction between country and regional diversification. This paper thus examines the effect of regional diversification, as well as the moderating effect of administrative intensity. Using longitudinal data containing firm-level operation information during 2002-2005, the empirical investigation indicates that an inverted U-shaped relationship exists between regional diversification and performance. We find that country diversification has less impact on firm performance, and regional diversification acts as a significant determinant on firm performance. Additionally, the administrative intensity moderates the relationship between internationalization and performance. For administrative intensity at lower level of regional diversification, higher administrative intensity will result in better performance.

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