Does Distance Matter? Impact of Geographic and Product Diversification and their Speeds on Performance

We explore the impact on firm level performance, of region specific operations and speeds of expansion, along with their interactions with product diversification and its speed. Going beyond the traditional home versus foreign region dichotomy, firms’ operations are categorised into four specific regions across the globe, and for each, the impact of aggregate operations and its speed on performance is evaluated. Firms’ product diversity and its speed of change are also included as potential moderators. Results reveal that the performance impact of incremental operations is very region specific, with no bearing with the traditional measures of inter-regional distance. A firm’s product diversity and its speed are revealed to be important strategic factors, especially in the context of expanding operations in regions which are less lucrative.