Customer referral programs are marketing programs in which existing customers are rewarded for bringing in new customers. The aim is to attract new customers by leveraging the social connections of existing customers with potential customers. Previous research has shown that referred customers are more valuable to a firm than non-referred customers. However, previous research solely focused on the customer lifetimevalueofthenewlyreferredcustomersanddoesnotlookatthe social network characteristics. A study by Kumar et al. (2010) argues that we shouldconsider two parts of customer value, namelycustomer lifetimevalueandcustomerreferralvalue. Thelattercanbeconceived as a customer’s potential to grow the network through referrals. Early work by Granovetter (1973) highlights the importance of weak social connections, like acquaintances, in a network due to their position as bridges, connecting different communities. Extending this knowledge to customer referral programs, we can argue that referrals over weak links are powerful for accessing new communities. In this study, we investigatetheeffectofreferralsandthetiestrengthbetweentheexistingandpotentialcustomerontheresultinggrowthofthenetwork. The finding of this study are particularly useful for start-ups or marketing campaigns aiming to grow the customer base.

We augment diversification and internal capital market (ICM) frameworks with an institutional perspective, arguing that the effect of diversification on performance is dependent not only on the specific type of diversification (international or industry) but also on the specific context of a company in terms of its home market and the heterogeneity of its international investments. We believe the value of diversification is contingent on the distances between markets of a firm and we assume that different types of distance (economic, political, financial and cultural) have different effects on firm performance. Our findings suggest that industry diversification has a negative effect on MNE performance, but ICM may be used to counter this effect, especially in times of economic downturn in the domestic market. The effect of international diversification is insignificant and depends on the specific context of a company’s portfolio of international investments. In an exploratory attempt, we find that a politically heterogeneous portfolio of investments may result in a negative performance, whereas cultural distance seems to spur economic performance of the MNE.