Internationalization speed and corporate long-term performance: Exploring the inverted U-shaped relationship

Zeyuanfeng Xiong, Chunxu Sun and Meihui Zhao

Finance Research Letters, 2024, vol. 69, issue PB

Abstract: Using data from China's A-share listed companies spanning 2002 – 2022, our research uncovers an intriguing inverted U-shaped dynamic between the velocity of firms' internationalization and their long-term performance. It reveals that while an initial acceleration in internationalization bolsters performance, an overly rapid pace can subsequently lead to a deterioration. Critically, the proportion of independent directors acts as a moderating factor, as a higher concentration of these directors facilitates a balance between the speed and risks associated with internationalization, ultimately optimizing long-term corporate performance. These findings offer vital insights for companies navigating their internationalization strategies and emphasize the importance of robust corporate governance.

Keywords: Internationalization speed; Long-term performance; Institutional shareholding ratio; Independent director ratio (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324012765

DOI: 10.1016/j.frl.2024.106247

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