A large and robust empirical literature demonstrates that there is a strong relationship between the performance of a multinational enterprise (MNE) and its degree of multinationality. We develop a new metric to capture the return on foreign assets (ROFA), which we use as an alternative metric to return on total assets (ROTA) as a dependent variable representing performance. We find a significant S-shaped relation between ROFA and the degree of multinationality across a large set of UK firms.

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Keywords Multinational enterprise (MNE), Multinationality, Return on foreign assets (ROFA), Return on total assets (ROTA)
Persistent URL dx.doi.org/10.1108/1525383X200900020, hdl.handle.net/1765/94009
Journal Multinational Business Review
Kudina, A. (Alina), Rugman, A.M. (Alan M.), & Yip, G.S. (2009). Testing the Link Between Multinationality and the Return on Foreign Assets. Multinational Business Review (Vol. 17, pp. 123–142). doi:10.1108/1525383X200900020