Multinationality, global market diversification and profitability among the largest US firms

This paper studies both geographic scale and scope of foreign operations for the largest US firms especially their strategic combinations by relating to the return performance. The test results indicate that the combination of high geographic scale and medium geographic scope of foreign operations outperformed other strategic combinations. This particularly suggests that the heavy or light geographic scope of foreign operations may possibly cause a downturn in profitability. The implication is that firms preparing themselves for overseas activities should consider the use of this strategic combination.