Study On Internationalization,Corporate Governance,Corporate Performance

Internationalization is an important development strategy for Chinese companies.After the company realizes internationalized operation,it will help realizing all-round upgrading of its technology,quality,management,and brand,thus enhancing its international competitiveness.However,it is puzzling that even though Huawei,Geely Automobile and other companies have successfully improved their performance and achieved sustainable corporate development through their internationalization strategy,many companies have experienced the failure of their international business that caused major losses to the company.At the same time,the existing literature has different conclusions on the relationship between internationalization and corporate performance.These conclusions are confusing.Therefore,both theory and practice point to a question that it deserves further study: what is the relationship between internationalization and corporate performance? And some other related questions derived from this: Why does internationalization have different effects on the performance in different companies? Is there a moderator in the relationship between internationalization and corporate performance?Enterprise internationalization is the decision result of the top management of the enterprise,and corporate governance is the guarantee mechanism for the correctness of the decision-making.The Asian financial crisis in 1997,the financial scandals like Anron,WorldCom in the United States in the early part of the century,and the international financial crisis in 2008 have caused the theoretical and practical to pay more attention to corporate governance.IFC research shows that the well-managed company’s share price fell less during the international financial crisis in 2008,the return on equity was higher,and other key performance indicators were better.This shows that good corporate governance can bring about better corporate performance and create higher value for stakeholders.Therefore,after the international financial crisis,corporate governance has become the focus of international organizations and governments.In view of this,this paper studies internationalization,corporate governance and corporate performance,focusing on the current status of internationalization of Chinese companies and the impact of internationalization and corporate governance on corporate performance,and whether corporate governance plays a regulatory role on internationalization and corporate performance.In terms of the theoretical research on internationalization,corporate governance and corporate performance,this paper analyzes the theoretical basis for the higher requirements of internationalization on corporate governance based on agency theory and incomplete contract theory.Based on the theoretical framework of agency theory and incomplete contract theory,this paper also studies the measures for the improvement of corporate governance and corporate performance in international companies from four perspectives: organizational structure,incentive system,supervision system and information transfer system.In the area of empirical research on internationalization,corporate governance and corporate performance,this paper first presents exploratory cases study of Huawei and Geely Automobile.In addition,compare the performance of international and non-international enterprises from 2010 to 2015 as exploratory research data for internationalization,corporate governance and corporate performance.Secondly,this paper selects A-share non-financial listed companies in China whose overseas business income is greater than zero for at least one year from 2009 to 2014 as a sample company to empirically test the impact of the internationalization on corporate governance.The results show that the degree of internationalization is negatively related to the separated of the chairman and the general manager,the proportion of independent directors.Moreover,it has positive impact on executive equity incentive.Thirdly,this paper focuses on the sample of Chinese A-share non-financial listed companies whose overseas business income is greater than zero for at least one year from 2010 to 2015.According to the degree of internationalization,international companies are divided into low-international companies and high-international companies.Examine the relationship between internationalization,corporate governance and corporate performance of international companies of varying degrees.Further,we test whether corporate governance can regulate the relationship between internationalization and corporate performance.The results show that there is a significant negative correlation between the degree of internationalization and corporate performance,while for a low internationalization company with a degree of internationalization below 20%,this significant negative correlation has a greater impact.After increasing the degree of internationalization and corporate governance crossover indicators,results show that there is a significant positive correlation between the degree of internationalization and its performance,which means corporate governance can play a regulatory role in the impact of internationalization on corporate performance.That is to say,as the degree of internationalization increases,the more perfect corporate governance is,the better corporate performance is.This study can not only provide a theoretical basis for the international companies and corporate governance,but also provide a theoretical basis and reference for government departments to formulate relevant policies.It also has important theoretical value and practical application value to improve the international competitiveness of Chinese enterprises and successfully realize the “go global” development strategy.