The Relationship Between Internationalization And Enterprise Performance

Internationalization refers to the transnational operation of enterprises,and the degree of internationalization is a measure of the depth of oversea operations.The internationalization strategy of Chinese enterprises is an inevitable choice to follow the wave of globalization,and has become an organic component and core content of China's new round of reform and opening up.However,Chinese enterprises also face problems such as high risks and low returns in the process of internationalization,especially in recent years,economic globalization has repeatedly suffered setbacks."Anti-Globalization" phenomena,such as the trade war,have occurred from time to time.Therefore,this paper hopes to provide a certain reference for Chinese international enterprises by studying the relationship between the degree of internationalization and performance of enterprises.Based on the related theoretical research on the internationalization of enterprises and the current status of Chinese enterprises,this article first sorts out the influence mechanism of the degree of internationalization on the performance of China's enterprises,as well as the regulatory mechanism of the institutional environment.According to the theoretical analysis,this paper first establishes the linear model and the quadratic model of the relationship between internationalization and performance to develop the empirical analysis with a balanced panel data set for China's listed companies from 2013 to 2017 by using CSMAR database,China's Provinces Marketization Index Report 2018 and World Bank Global Governance Index.In addition,this article also examines the regulatory role of the institutional environment by adding the interaction term of the internationalization and the two institutional environments.Finally,based on the empirical analysis,two representative companies are selected from the sample for case analysis in order to optimize the research.The research shows that there is a “U” curve correlation between the degree of internationalization and performance of China's enterprises,and the coefficient of internationalization in the linear model is also positive,indicating that the international performance of Chinese companies is better than other companies in emerging countries.Further,regulatory effect models found that the institutional environment in home and host country will have a indirect regulating positive effect,that is,it can strengthen the beneficial impacts of the internationalization on performance,or weaken the negative impacts.