Internationalization and performance: evidence from Chinese firms

Chao Zhou (Department of Finance, Jinan University, Guangzhou, China)

Chinese Management Studies

ISSN: 1750-614X

Publication date: 3 April 2018



This paper aims to test the internationalization–performance relationship based on data of Chinese firms and the impact of firm size on the internationalization–performance relationship.


This paper uses overseas subsidiaries as a percentage of total subsidiaries to measure the degree of internationalization. As the overseas subsidiaries and total subsidiaries data of Chinese A-share listed firms are not available in any existing databases, the author hand-collected information on subsidiaries of Chinese A-share listed manufacturing firms from their annual financial reports during 2001-2014. The basic accounting and market information is collected from the China Stock Market and Accounting Research Database. This paper finally gets 535 manufacturing firms.


The empirical results suggest that the internationalization–performance relationship is W-shaped in overall samples, but varies with firm size. Specifically, the internationalization–performance relationship is W-shaped in small firms and U-shaped in large firms.

Research limitations/implications

Future studies based on unlisted Chinese firms or other measurement of internationalization may provide further understanding of the internationalization–performance relationship.

Practical implications

Policymakers should help small firms prepare a long-term internationalization strategy, giving more support for small firms in the first and third phases of internationalization and helping them to reach the second and fourth phases. Policymakers should also pay more attention to limit the aggressive internationalization behavior of large firms.


This study provides new evidence for the internationalization–performance relationship by using the unique longitude sample from China and the unique measurement of internationalization. We also highlight the importance of firm characteristics in the examination of internationalization–performance relationship, which provides a potential explanation for previous mixed evidence.



Zhou, C. (2018), "Internationalization and performance: evidence from Chinese firms", Chinese Management Studies, Vol. 12 No. 1, pp. 19-34.

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