Internationalization and Company Performance: A Study of Emerging Russian Multinationals

Russia is one of the fastest growing emerging economies and large Russian companies, mainly resource exporters, have entered the global markets in recent years. The internationalization process of Russian enterprises and its implications on foreign direct investment paradigms have attracted global interest. This paper studies the effect of internationalization on the performance of large Russian companies (state‐owned, privatized and de‐novo). The results show that international operations have a significant effect on company performance indicators. Companies with international operations have significantly higher profitability and labor productivity. However, profitability or labor productivity is not significantly higher in the early years of trade liberalization. The positive effects grow gradually with the integration of Russian companies to world markets. Specifically, the expansion of the de‐novo private sector has been strong.