We explore the performance implications of location choices Chinese multinational corporations (MNCs) make. Drawing on internalization and organizational learning theories, we find that developing country MNCs entering other developing countries experience a positive effect on their performance in the immediate term that, however, erodes over time because of the decay in their initial internalized advantages. Conversely, MNCs entering developed countries experience a negative effect on their immediate-term performance but a boost in performance over time because of the gradual realization of learning benefits. Our analyses of internationalization and performance of 207 Chinese-listed MNCs between 1992 and 2005 corroborate our key predictions.
- Location choice
- Organizational learning