Influence of industry type on the relationship between international operations and risk

Reducing strategic risk has become an issue of paramount importance to corporations. One way to reduce such risk is through international operations. However, published research reports conflicting findings on the relationship between international operations and risk reduction. In addition, the literature leaves one avenue largely unexplored, namely, industry influence. Using a sample of 367 firms, this study tests for the relationship between internationalization and risk across global and multi-domestic industries. Study findings indicate a negative relationship between risk and internationalization, indicating that firms are benefited by reduced risk through internationalization. Additionally, regression models indicate the incremental rate of benefits due to internationalization is greater in the case of global industries, compared to multi-domestic industries.