Enterprises’ Domestic Diversification and Their Internationalization Speed

Zhong Xi; Song Tiebo; Chen Weihong; Weng Yimin

doi:doi:10.16538/j.cnki.fem.2019.02.011

Summary

Taking the Chinese A-share listed companies from 2012 to 2016 as samples, this paper focuses on the impact of enterprises’ early domestic diversification on their internationalization speed in the later period. The result of this study shows: enterprises’ domestic geographic diversification in the early stage positively affects their internationalization speed in the later period, while enterprises’ domestic product diversification in the early stage negatively affects their internationalization speed in the later period. Further research finds: First, as TMT’s international experience increases, the prompting effect of early domestic geographic diversification on the faster implementation of enterprises’ international expansion will strengthen, while the inhibitory effect of early domestic product diversification on the faster implementation of enterprises’ international expansion will weaken. Second, as TMT’s overconfidence increases, the prompting effect of early domestic geographic diversification on the faster implementation of enterprises’ international expansion will weaken, and the inhibitory effect of early domestic product diversification on the faster implementation of enterprises’ international expansion will also weaken.　　The research contributions of this paper are as follows: First, this paper uses Chinese multinational corporations as samples to demonstrate once again the negative impact of enterprises’ early domestic product diversification on their internationalization speed in the later period. Second, by further integrating enterprises’ early domestic geographic diversification into the research framework, this study reinforces the explanatory power and predictive power of enterprises’ early domestic diversification on their international decision-making in the later period（such as enterprises’ decision-making of their internationalization speed）. This study provides a more systematic and complete new framework for interpreting how enterprises’ early domestic diversification affects their internationalization speed in the later period, and strengthens the explanatory power and predictive power of enterprises’ early domestic diversification on their decision-making of the internationalization speed in the later period. Third, by identifying and examining the impact of TMT’s international experience and TMT’s overconfidence on the relationship between enterprises’ early domestic diversification and their internationalization speed in the later period, this paper further clarifies the boundary conditions of enterprises’ early domestic diversification acting on their internationalization speed in the later period, and strengthens the contextual characteristics of the research framework.