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1 March 2011 Internationalization and Financial Performance in the Global Forest Industry
Y. Zhang, A. Toppinen
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In this study we analysed the relationship between degree of internationalization and corporate financial performance in the forest industry at firm level. Both linear and curvilinear regression models were estimated for the impact of depth and scope of internationalization on corporate performance, using data available for 50 large forest products firms. As a result, we confirmed a U-shaped curvilinear relationship between depth of internationalization (measured by percentage of foreign employees to total employees, FETE) and corporate financial performance (measured by return on capital employed, ROCE). The threshold proportion of foreign employees was found to be 35% in the forest industry. In addition, we also confirmed that the scope of internationalization (measured by number of operating countries, OC) has a positive effect on corporate performance. From a strategic management point of view, our study thus corroborated Michael Porter's dictum: “if you go global, do not get stuck in the middle” in the forest industry.

Y. Zhang and A. Toppinen "Internationalization and Financial Performance in the Global Forest Industry," International Forestry Review 13(1), 96-105, (1 March 2011).
Published: 1 March 2011
corporate performance
degree of internationalization
foreign direct investment (FDI)
forest industry
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