The Impact of the Enterprise Trans-Province Geographical Diversification on the Corporate Performance of the Manufacturing Industry in Eastern Part of China—Empirical Analysis Based on the Panel Data of the Listed Companies
China market is a divisional market. The distinction between the provinces in China is even larger than the one between some countries abroad. This article studies the relationship between the manufacturing expansion behavior across provinces in the east part of China and the corporate performance. Here two assumptions are presented in this article: 1) there exists a negative correlation between the geographical diversification degree across provinces and the corporate performance; 2) there exists a U-shaped relationship between the geographical diversification degree across provinces and the corporate. By studying the data on 442 China listed companies during the period of 2009 to 2014, it is found that the geographical diversification has a negative impact on the corporate performance when the geographical diversification degree is lower, while the geographical diversification has an active impact on the corporate performance if the geographical diversification degree is higher.
References
[1]
Bausch, A. and Krist, M. (2007) The Effect of Context-Related Moderators on the Internationalization-Performance Relationship: Evidence from Meta-Analysis. Management International Review, 47, 319-347. https://doi.org/10.1007/s11575-007-0019-z
[2]
Denis, D.J., Denis, D.K. and Yost, K. (2002) Global Diversification, Industrial Diversification, and Firm Value. Journal of Finance, 57, 1951-1979.
https://doi.org/10.1111/0022-1082.00485
[3]
Hennart, J.F. (2007) The Theoretical Rationale for a Multinationality-Performance Relationship. Management International Review, 47, 423-452.
https://doi.org/10.1007/s11575-007-0023-3
[4]
Capar, N. and Kotabe, M. (2003) The Relationship between International Diversification and Performance in Service Firms. Journal of International Business Studies, 34, 345-355.
https://doi.org/10.1057/palgrave.jibs.8400036
[5]
Yang, Y. and Driffield, N. (2012) Multinationality-Performance Relationship. Management International Review, 52, 23-47. https://doi.org/10.1007/s11575-011-0095-y
[6]
Sullivan, D. (1994) Measuring the Degree of Internationalization of a Firm. Journal of International Business Studies, 25, 325-342. https://doi.org/10.1057/palgrave.jibs.8490203
[7]
Ramaswamy, K. (1995) Multinationality, Configuration, and Performance: A Study of MNEs in the US Drug and Pharmaceutical Industry. Journal of International Management, 1, 231-253.
[8]
Tallman, S. and Li, J. (1996) Effects of International Diversity and Product Diversity on the Performance of Multinational Firms. Academy of Management Journal, 39, 179-196.
https://doi.org/10.2307/256635
[9]
Geringer, M.J., Tallman, S. and Olsen, D.M. (2000) Product and International Diversification among Japanese Multinational Firms. Strategic Management Journal, 21, 51-80.
https://doi.org/10.1002/(SICI)1097-0266(200001)21:1<51::AID-SMJ77>3.0.CO;2-K
[10]
Lu, J.W. and Beamish, P.W. (2001) The Internationalization and Performance of SMEs. Strategic Management Journal, 22, 565-586. https://doi.org/10.1002/smj.184
[11]
Ruigrok, W., Amann, W. and Wagner, H. (2007) The Internationalization-Performance Relationship at Swiss Firms: A Test of the S-Shape and Extreme Degrees of Internationalization. Management International Review, 47, 349-368.
https://doi.org/10.1007/s11575-007-0020-6
[12]
Hymer, S.H. (1976) The International Operations of National Firms: A Study of Direct Foreign Investment. MIT Press, Cambridge.
