The Role of Psychic Distance: The Internationalization Process of Chinese Multinationals in the European Union

Boqi Zhang () and Yao Pan
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Boqi Zhang: IAE Poitiers - Institut d'Administration des Entreprises (IAE) - Poitiers - UP - Université de Poitiers = University of Poitiers, CEREGE [Poitiers, La Rochelle] - Centre de recherche en gestion [EA 1722] - UP - Université de Poitiers = University of Poitiers - ULR - La Rochelle Université
Yao Pan: Zhongnan University of Economics and Law [China]

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Abstract: A lot of investment projects in European countries have been implemented by Chinese multinational enterprises since the introduction of the "China going global strategy". Furthermore, the global financial crisis of 2008 increased the vulnerability of many European firms thereby providing great opportunities for Chinese multinationals to undertake international development. To date, few studies have been undertaken to evaluate the performance and profitability of Chinese multinationals after their internationalization undertakings. Our paper intends to assess the profitability and performance of Chinese multinationals according to the "psychic distance" between them and their host countries. We adopt a quantitative method by taking into account the performance of a number of investment projects by Chinese multinationals in Europe between 2007 and 2017. The results answer the question as to whether the relationship between the performance and international development of Chinese multinationals is influenced by psychic distance.

Keywords: psychic distance; Chinese MNES; European Union; firm profitability; ROA; ROE; Uppsala model (search for similar items in EconPapers)
Date: 2020-05
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Published in Bernadette Andreosso-O’Callaghan; Jacques Jaussaud; Robert Taylor; Bruna Zolin. The Changing Global Environment in Asia and Human Resource Management Strategies, Nova Science Publishers, pp.121-141, 2020, 978-1-53617-612-4

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03015093

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