Firm internationalization and economic performance: A conceptual synthesis and an empirical assessment of the Chinese experience

Abstract

Firm internationalization or the degree of internationalization (DOI) has both been viewed as a critical dimension of company strategy and linked with enhanced firm performance. This research reports a theoretical postulation based on a conceptual synthesis and an empirical assessment, of this relationship among Chinese firms. Based on the economies of scale, market seeking, risk reduction and experiential learning benefits and possible threshold effects due to learning and accumulation, it is hypothesized that there is a curvilinear relationship between DOI and firm performance and furthermore firms in open or more marketized regions of China will benefit more from their internationalization efforts because of the supportive institutional environment. Multiple regression models employing a large data set of Chinese firms provided supportive empirical evidence. Theoretical and practical implications and research directions are considered.