Multinationality And Corporate Performance Among Chinese Manufacturing Firms

The economic globalization, mainly carried by multinational firms, has led to the optimal allocation of resources worldwide, bringing both opportunities and challenges to firms in different countries. China implemented its "going out" strategy since2000, and an increasing number of enterprises expand from the domestic market to overseas markets. Well, compared with developed countries, the multinational operations of Chinese enterprises is in what stage; if multinational operations promote the improvement of corporate performance, what is the intrinsic linkage between the degree of multinationality and performance and what kind of firms is more suitable for cross-border operations? These are urgent questions needed to be solved in the process of corporate multinational operations.Based on theoretical introduction and literature review, this paper firstly analyzes the current situation and characteristics of Chinese multinational firms and found that China’s firms are still showing obvious features of the primary stage in developing countries. Then the paper selects536manufacturing firms operating cross-border business in China’s Shanghai and Shenzhen A-share listing as the object of the study, with the method of descriptive statistical analysis, correlation analysis and multivariate regression to expand the empirical research.Different from previous studies, this paper divides the sample group and gives a comparative analysis according to different degree of multinationality and different manufacturing sub-sectors, trying to figure out the optimal degree of multinationality which has the greatest positive impact on the corporate performance, and the ranking of optimal industry in which multinationality greatly improve corporate performance.The empirical results show that:(1) to carry out multinational activities will affect the operating performance;(2) the different degree of multinationality has different impact on the operating performance. The degree ranging from30%to40%improves its operating performance most obviously;(3) The factor of industry influences the relationship between the degree of multinationality and the business performance. For firms which produce pharmaceuticals and biological products, electronics, petroleum, chemical and plastic, metal and nonmetal products, multinational operations enhance the business performance most effectively.