R&D performance and international diversification: Evidence from an emerging market

This study investigates the impact of international diversification on the lag effect of R&D performance for implementing an international diversification strategy. The study uses the sales base amount and the number of countries, respectively, to explain the depth and breadth of international diversification. The results suggest that the higher the level of international diversification, the more profound the positive impact of the international diversification on the R&D activities‐derived operating performance. The study also confirms that companies with broader international diversification have a higher positive R&D lag effect. The empirical results are robust to the problem of endogeneity.