Location and Performance

The current study contributes to a better§understanding of how firm performance varies in§time, with a particular emphasis on measuring the§influence of the home-country location to the§dispersion of firm profitability around the global§norm. This research focuses on the theme of§inter-firm differential performance and measures how§a structural element of the international market,§specifically the national locality of corporate§headquarters, influences the distribution of rates of§return among existing firms. Researchers in strategic§management have been increasingly interested on how§different national environments influence the§variance of firm performance. Although many empirical§studies identified and measured determinants of firm§performance within the context of a single national§economy, relatively few considered determinants of§firm performance across countries.The strategy field§still has not answered conclusively how home-country§of firms affects firm performance in the long term.§Based on modern econometric methodologies and a large§cross-country panel data, the current research points§to a consistent process of industrial clustering§occurring in the global economy.