BUS613: Advanced International Business

Generating income, increasing stakeholders' wealth, or providing both material and immaterial needs of society, are various business methods firms use to grow strong. The monetary returns as one of the ultimate goals of the firm, and acting on the interests of shareholders have been targets for managers. The paths towards such goals are achieved by means of strategic decision making, employing strategies that fit to the firm's internal and external environment. These may include, focusing on manufacturing quality, differentiating in service providing, or restructuring the firm's cost structure. Nevertheless, the determinants of firm performance and firm value are numerous and intertwined in many aspects. The impacts of R&D expenditure, capital expenditure, and industry profitability on firm performance are discussed in earlier studies.

This paper investigates the threads between resource allocation to R&D, capital expenditure, international diversification, and their individual and interactive impacts on firm performance. The context of this study is a resource-based view and transaction costs theory. Firms that are going international benefit from the resources available to them outside their home country as well as from the implementation of their core competencies in other countries. The compartmentalization of such benefits into the constructs of variables is discussed.