Degree Of Internationalization Research Articles

Exploring the multifaced influencing factors of corporate social responsibility in Chinese-listed manufacturing enterprises

Although scholars have conducted research on the corporate social responsibility (CSR) of Chinese firms from different perspectives, there has been no unified conclusion so far. Therefore, identifying the factors that influence CSR in Chinese enterprises is an important topic for further investigation. Does the debt leverage ratio, ownership type, degree of internationalization (DOI), and auditing by the Big Four accounting firms have an impact on CSR? Based on a series of questions, our study aims to explore the influencing factors and relationships of CSR from multiple angles. Using data from 252 Chinese A-share listed enterprises from 2014 to 2019 and the CSR scores from the Hexun.com rating index, we constructed a panel dataset comprising 1,414 firm-year observations. After comparing models, the fixed effects method of panel data is ultimately used for empirical regression. The research results indicate a significant negative correlation between the leverage ratio and CSR. State-owned enterprises (SOEs) outperform non-state-owned enterprises (non-SOEs) in terms of CSR. There is a significant positive correlation between DOI and CSR. However, the contribution of audits by the Big Four accounting firms to CSR in Chinese enterprises is limited. While our study examines many aspects of the elements that affect corporate social responsibility (CSR) in Chinese companies, each firm must consider its circumstances and apply suitable strategies to improve its CSR practices.

Firm internationalization approaches and performance: the moderating role of the home country's formal institutions

PurposeThis study investigates how the degree of internationalization (DOI) affects the financial performance of emerging market companies by making the distinction between export intensity and multinationality (i.e. foreign direct investment). The authors argue that the different DOI-performance patterns in the literature relate to different internationalization approaches, which are moderated in distinct ways by formal institutions in the home country.Design/methodology/approachBased on data of Brazilian firms in several industries and with different internationalization patterns including 100 exporting firms and 30 multinational companies with varying degrees of multinationality over a period of five consecutive years, the authors test their hypotheses using an unbalanced panel data with 346 firm-year observations. In order to test how the quality of formal institutions moderate the DOI-performance relationships, the authors estimate the changes in the slope of the regression line by adding and subtracting one standard deviation to the Worldwide Governance Indicators (WGI) variables.FindingsA positive and linear association between export intensity-performance (EI-P) highlights the location specific comparative advantages of exporting Brazilian firms, while the multinationality-performance (M-P) relationship points to a horizontal S-shape pattern which conforms to the theoretical assumptions of the three-stage internationalization process. Formal institutions moderate positively the EI-P relationship, but moderate negatively each of the three stages of the M-P relationship.Research limitations/implicationsThe findings from this study provide critical insights that contribute to the ongoing debate on how formal institutions in the home country affect the DOI-performance relationship of emerging market companies (EMCs). However, the authors consider that it has limitations as they focused exclusively on formal institutions captured by governance institutions in the Brazilian context.Practical implicationsThis study provides relevant insights to managers and policy makers. Findings reveal that strong formal institutions in the home country make it easier (cheaper) for EMCs to invest abroad, and, at the same time, increase the efficiency of exporting firms and positively influence financial performance. Moreover, results show that during downturns in their domestic markets, multinational EMCs outperform domestic firms. In that sense, while policy makers can promote the internationalization and competitiveness of EMCs by implementing more supportive formal institutions, managers should consider a proactive approach and invest abroad when conditions in the home country are favorable.Originality/valueBy making the distinction between export intensity and multinationality this study contributes to the literature on the DOI-performance of EMCs providing a more nuanced view on how formal institutions in the home country moderate the EI-P and M-P relationships in different ways.

A New Big Data and Logistic Regression-Based Approach for Small and Medium-Sized Enterprises

Businesses are being asked to assess an expanding volume of actual semi-structured and unstructured statistics to address the obstacles of internationalization and deal more effectively with the uncertainties of international integration. Big Data (BD) analytics can therefore play a strategic role in promoting the international expansion of Small and Medium-Sized Enterprises (SMEs). The exact connection between BD Analytics and globalization has, however, only been sporadically examined in the existing literature. In this study, a quantitative analysis using a Logistic Regression (LR) concept revealed that the interaction effects between BD Analytics architecture and BD Analytics functionality are both helpful and significant but the connection between the management of BD Analytics architecture and the Degree of Internationalization (DI) is not required for internationalization development. This shows that increasing internationalization in SMEs requires more than BD Analytics governance alone. Instead, this study emphasizes the importance of building particular BD Analytics abilities and the availability of a beneficial interaction between management of BD Analytics architecture and BD Analytics abilities that could take advantage of the new information gained via BD Analytics in SME global expansion.

Degree of internationalisation and firm performance: the flattening role of organisational slack resources

PurposeThis study aims to analyse the impact of the degree of internationalisation (DOI) on firm performance (FP), with the moderating role of organisational slack resources, namely, absorbed slack human resources, absorbed financial slack resources and unabsorbed slack resources, in the context of Asian emerging markets.Design/methodology/approachData includes 45 companies and 225 observations in 2014–2018. The authors adopted the generalised least squares method to test their hypotheses.FindingsDOI negatively influences FP, indicating that the link between DOI and FP is not U-shaped but relatively linear. Absorbed human resources and absorbed slack financial resources significantly enhance FP, absorbing resources associated with DOI and FP. Unabsorbed slack resources play a minor role in mitigating the deleterious impact of DOIs on FP.Practical implicationsFirms in an emerging market should begin exploring and expanding into overseas markets with characteristics similar to the domestic market. The firm should optimise the benefits of slack resources by appropriately allocating resources to strategic operations.Originality/valueThis study reveals the beneficial effect of organisational slack resources on the DOI-FP relationship via the lens of the resource-based view.

Degree of Internationalization, Financial Structure and Cost of Capital: Evidence from Emerging Taiwan

The debt structure of companies in Developing and Emerging Economies (DEEs) is significantly different from that of companies in the developed countries. This study examines the effect of degree of internationalization (DOI) on leverage ratio (LEV) and cost of capital (COC) in DEE setting by using a sample of Taiwan listed companies.  Our results show that DOI has a significant positive impact on short-term debt as well as a significant negative impact on long-term debt. Therefore, it appears that DOI has a substitution effect in DEE companies. In summary, our results indicate that DEE firms do not have the advantage of participating in the international financial market.  

EXPLORING THE RELATIONSHIP BETWEEN GOVERNMENT INSTITUTIONAL SUPPORT AND EXPORT STRATEGIC PERFORMANCE

The study presented in the article examined the mediating role played by internationalisation in both government financial support–export strategic performance and government non-financial support– export strategic performance relationships. The moderating role of a strategic alliance in the relationships between government financial support and degree of internationalisation, and between government nonfinancial support and degree of internationalisation, was also considered. The study entailed a cross-sectional survey and included 301 indigenous export firms in Ghana. The reliability and validity of the data was tested using confirmatory factor analysis, with structural equation modelling as the primary means of analysis, run using Amos (v.23). It was concluded that both government financial support and non-financial support had a direct positive influence on export strategic performance. These relationships were partially mediated by the degree of internationalisation. Strategic alliance positively moderated the relationships between government financial support and degree of internationalisation, and also between government non-financial support and degree of internationalisation. Keywords: government financial support; government non-financial support; strategic alliance; internationalisation; export strategic performance

Does internationalization matter for corporate social performance of Chinese firms?

AbstractThe purpose of this paper is to explore the relationship between the internationalization of Chinese firms and their corporate social performance (CSP), a topic that remains largely unexplored for Chinese firms. Based on a sample of 325 firms listed on the China A‐shares market from 2010 to 2017, we find a positive relationship between the degree of internationalization (DOI) and CSP of Chinese firms. A positive relationship is also confirmed between corporate financial performance (CFP) and CSP in Chinese firms. However, we find that the interaction between CFP and DOI correlates negatively with CSP, indicating that during internationalization, CFP might not be conducive to improving CSP. Most listed firms in China are state‐owned enterprises (SOEs), and we find that their CSP is inferior to that of non‐SOEs. Finally, we find that hiring one of the four major accounting firms to conduct audits is conducive to a significant improvement in CSP. Managerial and policy implications derived from the results are discussed.

Role of international strategic alliances in internationalization of business group affiliated firms—A system dynamics approach

AbstractInterest in business groups (BGs) and international strategic alliances (ISAs) has been of interest in recent times for both academics and practice. However, there are scant studies on the interface of ISAs of BGs and their internationalization performance. This study aims to explore the role of ISAs in the internationalization of BG affiliated firms (BGAFs) by taking a system dynamics approach. The paper explores how different configurations of ISA (motive, scope, structure, orientation and partner) and BG characteristics (diversity, ownership heterogeneity and resource endowment) impact the degree of internationalization (DOI) and financial performance of firms. The model was validated on 17 BGAFs across 8 diverse industrial sectors, subsequent to simulation studies of 60 variables manifesting in 6336 ISAs formed by 405 BGAFs and 440 Non‐BGAFs. Our findings suggest a curvilinear relationship between DOI and financial performance of BGAFs.

Degree of Internationalization and Performance of High-tech Small and Mediumsized Enterprises: Evidence from Korea

Purpose – In this study, we explore the relationship between the degree of internationalization (DOI) and firm performance (DOI–P) of small and medium-sized enterprises (SMEs) in the manufacturing sector. Specifically, we investigate whether the costs and benefits dynamics concerning the internationalization of SMEs differ between high-tech and non-high-tech industries. Design/methodology – We extend the prior literature on this relationship by employing 5-year data on 589 Korean SMEs in the manufacturing sector and examining the moderating impact of the industry characteristics. Our findings reveal a U-shaped relationship between the DOI and SME performance. High-tech SMEs demonstrate an inverted U-shaped relationship, whereas non-hightech SMEs exhibit a U-shaped relationship. Findings – Our findings illustrate the importance of the industry factor in testing the performance impact of the internationalization of Korean SMEs. By incorporating industry dynamics, our results indicate that the DOI–P relationship depends on the context of the industry in which an SME operates. High-tech SMEs also display a higher DOI but are outperformed by non-high-tech SMEs for the entire internationalization path, which implies that high-tech SMEs face more challenges than non-hightech SMEs while seeking internationalization. Originality/value – The findings strongly validate that significant benefits exist for SMEs undertaking internationalization. We also employ the contextual framework contributing to increasing the understanding of the intrinsic value of internationalization and resolving the mixed results issue on the DOI–P relationship, by illustrating that the industry factor leads to different dynamics of costs and benefits of SME internationalization; it also determines the shape and direction of the relationship.

Measuring the Degree of Internationalization (DOI) of Indian Manufacturing Companies

Many Indian companies from manufacturing sectors such as industrial, consumer discretionary, and materials have forayed into international markets through exports, overseas ventures, mergers and acquisitions (M&As), joint ventures, etc. Still, there remain unanswered findings to be gained from new research to measure the degree of internationalization (DOI) of international business operations by applying an index, for the first time, to Indian manufacturing companies. Moreover, existing studies, predominantly emanating from developed economies, have explored DOI in the context of developed economies. The extant approaches are limited because explaining the phenomenon of measuring the DOI of firms from emerging economies using frameworks designed for companies in developed countries may lead to incorrect results, as they are characterized by institutional voids like poor governance, greater governmental control, and nascent institutions. This original empirical investigation researched vital phenomena pertaining to Indian manufacturing companies by addressing the gaps outlined above. Researchers can cite germane measures of DOI via the proposed index to support academics and practitioners to determine whether a specific Indian manufacturing company has recently ventured into or plans to launch into the international markets by employing a more thorough composite measure of DOI.

How learning orientation drives the international performance of INVs: the roles of entrepreneurial bricolage and degree of internationalization

PurposeDespite extensive research into the effect of organizational learning processes on firm performance, it remains unclear how and when learning orientation influences the international performance of international new ventures (INVs). Accordingly, the purpose of this paper is to investigate how learning orientation drives the international performance of INVs.Design/methodology/approachStructural equation modeling is used to test the research model with questionnaire data from mainland Chinese INVs.FindingsResults show that: learning orientation positively influences entrepreneurial bricolage; entrepreneurial bricolage positively influences the international performance of INVs; entrepreneurial bricolage plays a mediating role between learning orientation and international performance; degree of internationalization (DOI) weakens the effect of entrepreneurial bricolage on international performance.Originality/valueThis study makes a useful supplement to the INV literature by revealing that entrepreneurial bricolage plays a mediating role in the relationship between learning orientation and the international performance of INVs. It also contributes to the entrepreneurial bricolage literature by introducing entrepreneurial bricolage into the empirical research of INVs and identifying the learning orientation antecedents and performance consequences of entrepreneurial bricolage. In addition, this paper enriches the understanding of the boundary conditions for how entrepreneurial bricolage affects international performance showing that DOI has a negative moderating effect on the relationship between entrepreneurial bricolage and international performance.

Language and discounting future value: language as a moderator of internationalization–innovation performance relationships

PurposeResearch on relationships between firms' degree of internationalization (DOI) and innovation performance has been mixed, and moderators of these relationships need to be explored. We focus on patents granted as an indicator of innovation performance and explore the moderating role of firms' home-country languages on the DOI–innovation performance relationship. We argue that in countries with languages that always require speakers to grammatically mark the future, firms will focus less on the future value of patents, which should moderate DOI–innovation performance relationships.Design/methodology/approachWe use an unbalanced panel consisting of 567 firm-year observations of 64 different large automotive suppliers from the year 2007 through 2019. This database was analyzed using negative binomial models with a 3-years lag structure and firm controls.FindingsResults show a U-shaped DOI–innovation performance relationship, but only for firms from countries that do not always require speakers to grammatically mark the future. Additionally, a firm's status as being from a country where dominate languages always require speakers to grammatically mark the future has a direct negative relationship with innovation performance.Research limitations/implicationsLimitations are that the sample included a large number of firms from one country (i.e. Japan) and focused on a single industry. Additionally, we used a narrow operational definition of innovation performance (i.e. patents) and relied upon a single methodology. In terms of implications, we identify one moderator that helps explain mixed results of past DOI–innovation performance research, and we identify a direct relationship between language and innovation performance. Hence, future research in this area should control for the dominant language type of firms' home countries.Originality/valueTo our knowledge, this is the first study to examine how language moderates DOI–innovation performance relationships and also relates to innovation performance directly.

Internationalization and Firm Performance: Case of Manufacturing Enterprises in Ecuador

This paper aims to investigate the impact of internationalization on manufacturing enterprise performance in Ecuador. Using a panel data of 90 enterprises in Ecuador over the year 2003, 2006, 2010, and 2017 collected by the Worldbank Enterprises Survey project, with the Random Effects Model (REM) and the Fixed Effects Model (FEM), the regression result shows that the degree of internationalization (DOI) has a non-linear impact on firm performance under the inverse S-shaped curve. Besides that, the factors related to the business environment, such as bribery, access to finance, and skilled laborers' barriers, also negatively impact these firms' performance. The study's implication provides not only for firms but also for policymakers to support Ecuador businesses in the process of internationalization.

R&D Investment and Patent Application: The Effects of Internationalization and Ownership

The purpose of this paper is to assess whether research and development (R&D) investment, degree of internationalization (DOI), and ownership structure affect the patent application of enterprises in an emerging market. Using a firm-level data from 242 China's information and communication technology (ICT) and automobile manufacturing listed companies on Shanghai and Shenzhen A- stock exchanges market from 2011 to 2015, our empirical results demonstrate that: (1) the degree of internationalization of enterprises has a positive facilitating influence on the correlation among corporate R&D investment and a patent application; (2) the state-owned ownership negatively moderates the R&D investment-patent application link, and (3) international expansion can adequately compensate for the efficiency disadvantages of R&D investment and patent application engender by state ownership. Besides, the study discovered and explained an exciting phenomenon and bring forth important enlightenment to enterprises in the emerging economies to improve resource utilization efficiency and achieve technical ability to catch up.

Big data analytics (BDA) and degree of internationalization: the interplay between governance of BDA infrastructure and BDA capabilities

In order to face the challenges of internationalization and to cope more efficiently with the uncertainty of foreign expansion, firms are called to analyze an increasing amount of real-time semi-structured and unstructured datasets. In this sense, big data analytics (BDA) can become strategic in stimulating the international growth of small and medium-sized enterprises (SMEs). However, the specific relationship between BDA and internationalization has been analyzed fragmentarily within the mainstream literature. With the purpose of shedding light on this relationship, the authors drew on resource-based view (RBV) and collected data through a questionnaire directed to CEOs of 266 SMEs, receiving 103 responses. A quantitative analysis based on an Ordinary Least Squares (OLS) regression showed that the relationship between governance of BDA infrastructure and the degree of internationalization (DOI) is not significant, while the direct effect of BDA capabilities as well as the interaction term between BDA infrastructure and BDA capabilities are positive and significant. This suggests that the governance of BDA per se is not enough for enhancing internationalization in SMEs. On the contrary, this article points out the relevance of developing specific BDA capabilities and the existence of a positive interplay between governance of BDA infrastructure and BDA capabilities that can exploit the new knowledge coming from BDA in SME international growth.

Perceived corruption, business process digitization, and SMEs’ degree of internationalization in sub-Saharan Africa

This paper contributes to international business literature by investigating the relationship between perceived corruption and the degree of internationalization (DoI) through business process digitization (BPD). Moreover, the paper examines the moderating effect of firm age on the correlation between perceived corruption and BPD. Using data collected from two sub-Saharan African countries—Ghana and Nigeria, the findings show that perceived corruption is positively correlated to BPD and this correlation is stronger among younger firms. Besides, the findings reveal that BPD is positively correlated to DoI. Moreover, the results of our analysis also indicate that BPD mediates the correlation between perceived corruption and DoI. The limitations of the study and the implications of its findings for researchers and practitioners are discussed.

Family involvement, internationalisation and performance: An empirical study of the Spanish hotel industry

The hotel industry includes a very large number of family enterprises. Hence the importance of studying the characteristics of such firms and their relationship with company decisions. Since the hotel industry can be considered highly globalised, the aim of this paper is to find how the degree of internationalisation (DOI) of family firms (FFs) influences their results. Concretely, this study empirically tests a model which brings together the following three issues for the Spanish hotel industry: family involvement, DOI and performance. Drawing on a sample of 76 internationalised Spanish hotel chains, we applied a component-based structural equation modelling (partial least squared-PLS). Our results show that internationalisation is a determining factor for the performance of Spanish hotel FFs. In our model, DOI is considered a mediating variable, and our findings suggest that a greater level of family involvement in the firm positively correlates with performance.

Linking governance structure and sustainable operations of Chinese manufacturing firms: The moderating effect of internationalization

Based on 2,775 firm-year observations of Chinese manufacturing firms (CMFs) as their significant impact on mitigating climate change and distinctive governance structures, this paper examines whether CMFs’ internationalization degree (INTD) improves the effect of their governance structure (GS) on sustainable operations (SO). Specifically, we define GS from aspects of ownership concentration, size of independent director, and state-holding intensity. Through OLS regression, Fixed Effect Test, and Random Effect Test, the change of SO can be robustly explained in a systematic manner. Empirical results present that CMFs’ INTD is lower in general. Stronger state-holding can significantly improve SO, and INTD can motivate ownership concentration to act on SO. Further, INTD that exceeds the average of all sample significantly improves ownership concentration’s effect on SO, but lower INTD is unable to promote any GS indicator to produce a positive effect. Additionally, the size of independent director has not been able to improve SO. Our findings indicate that key shareholders’ decision-making authority more directly guides firms’ sustainability, and thus CMFs with centralized governance mode are more likely to develop SO. What’s more, global-market expansion provides a feasible path that helps link corporate governance and SO.

Transnational board interlocks

PurposeWhile previous studies have focused on the role of directors in the formation of transnational interlocks, this paper argues that firm strategy can also influence the development of these relationships. The purpose of this paper is to shed light on the practice of transnational interlocks by extending board interlocks theory from the national to the transnational context, and exploring aspects that are unique to the transnational level.Design/methodology/approachBased on the experiences of four British firms, this paper develops a conceptual framework that integrates under-examined dimensions of this networking practice at the organizational level of analysis, specifically degree of internationalization (DOI) and psychic distance (PD).FindingsThe paper argues that firms will increasingly engage in transnational interlocks as internationalization intensifies, and that expansion into psychically distant countries may result in further engagement in these connections. Further, firms will tend to form transnational received interlocks at their early stages of internationalization, and transnational sent and neutral interlocks at later stages of this process. It identifies four categories of firms: locals, extenders, explorers and cosmopolitans.Practical implicationsDirectors can contribute to their firms’ success by interlocking with firms located in key foreign markets. Firms should also welcome directors with transnational board appointments to secure knowledge and resources overseas.Originality/valueThe manuscript contributes to our understanding of transnational interlocks by examining the independent and joint influence of the firm’s DOI and PD on the formation of such relationships.

The impact of SME internationalization on innovation: The mediating role of market and entrepreneurial orientation

In today's highly competitive global environment, even small and medium-sized enterprises (SMEs) need to make product and process innovations in order to outperform the competition and satisfy global customers. Investigating the success factors of innovation performance has become critical for the survival and competitiveness of SMEs. The aim of this study is to explore the impact of the degree of internationalization (DoI) on innovation performance through the mediating factors of market and entrepreneurial orientation in the context of emerging-market SMEs. We tested our model and hypotheses with 235 SMEs in the United Arab Emirates, which is an emerging market. The results obtained from partial least squares estimates indicate that the degree of internationalization positively affects innovation performance and, more importantly, that this relationship is indirect and fully mediated by market and entrepreneurial orientation for SMEs. These results shed light on the mechanism of the effect of DoI on innovation performance in the emerging-market SME context.