ABSTRACT
Previous empirical results on the relationship between internationalization and firm performance have been mixed. Both linear and non-linear relationships have been reported. The linear analysis that was used by previous studies shows different results. Most recent studies are focused on nonlinear analysis to describe the relationship between internationalization and firm performance. This paper focuses on analyzing the relationship between Degree of Internationalization (DOI), measured by Foreign Sales to Total Sales (FSTS) ratio, and firm performance, measured by return on asset, return on equity, net profit margin and total assets turnover. Ordinary least square multiple regression and a curvilinear regression model were used to test the hypothesis. The result shows that the relationship between internationalization and firm performance is more significant in curvilinear regression analysis.
