Transition Model Of Enterprise Internationalization

About the effect of internationalization on corporation performance, academic research has been carried out for nearly 40 years. According to the different study methods, the conclusions are also different. Early scholars have focused on the linear effect of internationalization. Later, many scholars believe that because of the complexity, degree of internationalization and performance of enterprise internationalization behavior does not have a significant linear relationship. More research shows that its impact is U-shaped, inverted U-shaped or S-shaped. Chinese scholars started late on this issue. And it has been adjusted in accordance with China’s national conditions research. Most studies suggest that the degree of internationalization has a positive impact on performance. There is no consensus conclusion neither in the West nor our country theorists.According to the actual situation of Chinese enterprises’internationalization, some enterprises get huge profits from the international market because of the "going out" strategy, but some enterprises don’t have a very smooth international road. In recent years, some Chinese enterprises in the international market also suffered a failure due to various reasons in M&A. Therefore, in view of internationalization on the performance, there is a need for more in-depth study. What stage are Chinese enterprises in? What kind of indicators is suitable for the degree of internationalization of Chinese enterprises to measure? How can Chinese enterprises to choose their own way of carrying out international strategy? These issues also need to conduct in-depth discussion.This paper is based on previous studies of many scholars. This paper divides stages of internationalization of China’s enterprises in a way, and proposes two model of enterprise internationalization. First, we find that Chinese enterprises that simply export pathway acts as an international business accounted for a larger while enterprises that have overseas subsidiaries and investee accounted for fewer. Therefore, this paper based on the exports percentage and overseas subsidiaries percentage, divides Chinese enterprises into four stages:the occasionally export stage, the export-oriented state, the acquisitions stage and the global operations stage. If the path of international business develops from the occasional exports stage to the export-oriented stage, it indicates that companies have chosen the export model. And if the path of international business develops from the occasional exports stage to the acquisitions stage, it indicates that companies have chosen the investment model. Under export model, enterprises are facing a smaller cost, and under investment model companies need to pay a larger pattern of overseas costs.Based on these two modes, the paper discusses the impact of corporate behavior of internationalization on firm performance. In the export model, companies are affected by the larger international market volatility, and the level of performance will reduce. While when enterprises raise export behavior into business strategy, enterprise performance will increase with export level. But regardless of the performance movements, effect of the degree of internationalization on the performance is gentler. In the investment model, this paper divides internationalization into internationalization of depth and internationalization of breadth. When companies invest overseas, performance will reduce due to costs improved. With the widespread distribution of overseas subsidiary companies, the role of overseas subsidiaries began to appear. The overseas companies have a greater promotion of their exports, which also have a positive impact on business performance. Overall the positive effect of overseas subsidiaries is greater than the negative effect. At the same time enterprises tend to first establish trading subsidiary when they invest in overseas subsidiaries, and then create a production subsidiary. Type of subsidiaries also has a significant impact on corporate performance.Then, this paper proposes "path stickiness" and "geographical stickiness" under two models that often occur, and proposed internationalization transition mode. Path stickiness means that enterprises tend to choose a simple way when they carry on the internationalization. The geographical stickiness means enterprises tend to invest in familiar overseas markets and avoid exploring new market. This paper pointed out that if the company can get rid of the stickiness at the right time, they can get the performance leap.In the empirical analysis phase, the paper chose the Listed Companies of SSE classification standard as samples. In order to eliminate the year undulation, the paper chooses data of 2011 and 2012 to carries on the section analysis. The paper collects export percentage, overseas subsidiaries percentage, overseas subsidiaries type and many other data. The results show that Chinese enterprises meet the above model. In the transition stage, companies can break through the path stickiness and geographical stickiness when export percentages were 47.17% and 42.43%. Finally, the paper makes recommendations based on the empirical results for the internationalization of Chinese enterprises. Enterprises should improve the breadth of internationalization, optimize the overseas subsidiaries type and increase R & D investment, so that our companies have been able to maintain high efficiency growth in international road.