Relationship between Internationalisation of Firms and Economic Performance: A Case Study Selected Banks in Nigeria.

Abstract

Despite the growing internationalisation of firms from the developing economies, study examining the effect of internationalisation on their economic performance remain elusive, as evidence from prior studies are based on firms from the developed and the emerging economies. This study examines the relationship between the internationalisation, measured by percentage of foreign assets over total assets and performance, measured by return on assets of Nigerian banks. By using a cross sectional panel data covering the period of 2008 – 2010, Ordinary Least Square (OLS) result showed a positive relationship while the ANOVA result showed a significant relationship between internationalisation and the economic performance of the banks. The study concluded that international expansion can bring better economic performance to firms from developing economies. However, internationalising firms must be wary of the potential challenge of over-internationalisation which may negate the expected economic benefit.

Keywords: Internationalisation; Firm; Economic performance; Developing economies