Optimal geographic diversification and firm performance: evidence from the U.K.

Nigel Driffield, Jun Du, Sourafel Girma

Research output: Contribution to journalArticlepeer-review


This paper examines the relationship between multinationality and firm performance. The analysis is based on a sample of over 400 UK multinationals, and encompasses both service sector and manufacturing sector multinationals. This paper confirms the non-linear relationship between performance and multinationality that is reported elsewhere in the literature, but offers further analysis of this relationship. Specifically, by correcting for endogeneity in the investment decision, and for shocks in productivity across countries, the paper demonstrates that the returns to multinationality are greater than those that have been reported elsewhere, and persist to higher degrees of international diversification.
Original languageEnglish
Pages (from-to)145-254
Number of pages110
JournalJournal of Productivity Analysis
Issue number2
Early online date8 Aug 2008
Publication statusPublished - Oct 2008

Bibliographical note

The original publication is available at springerlink.com


  • multinational
  • performance
  • productivity


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