The Research On The Relationship Between International Experience And Multi-dimensional Distance And Performance Of Overseas Subsidiaries

In the wave of economic globalization,many large-scale enterprises in developed countries have been out of the country early and have made their mark on the world stage.However,in recent years,the total amount of foreign direct investment in the world has declined historically.In 2018,the total amount of foreign direct investment in Europe decreased by 73%.The relatively bad international investment environment has a great impact on the overseas operations of enterprises in various countries.China has set up 39200 enterprises in 190 countries and regions,but these enterprises are facing severe survival pressure.Therefore,how to improve the performance of foreign subsidiaries has become a topic worthy of discussion.As an intangible resource of an enterprise,international experience is an important factor to realize the integration and development of parent-subsidiary companies.But is it true that more international experience is better? Under different institutional distance and cultural distance,will the effect of international experience on the performance of foreign subsidiaries change? Based on resource-based view and organizational learning theory,this paper will explore the relationship among international experience,multi-dimensional distance and performance of foreign subsidiaries.This paper selects foreign subsidiaries owned by A-share listed companies in Shanghai and Shenzhen stock markets from 2005 to 2018 as samples to carry out empirical research,and discusses the relationship between international breadth experience and international depth experience and the survival rate of foreign subsidiaries,as well as the moderation effect of institutional distance and cultural distance on the relationship between them.Based on the theoretical research,this paper suggests six hypotheses,and finally obtains the following conclusions through data regression and analysis: firstly,there is a significant positive relationship between the international depth experience and the performance of foreign subsidiaries,but this positive relationship shows a trend of marginal decline.Specifically,the enterprises with more international depth experience have better performance of their foreign subsidiaries,but this performance improvement effect will not be sustained all the time;secondly,the international breadth experience and the performance of foreign subsidiaries show a significant inverted U-shaped relationship;thirdly,institutional distance and cultural distance can negatively moderate the positive relationship between the international depth experience and the performance of foreign subsidiaries;fourthly,institutional distance and cultural distance can negatively moderate the relationship between the international breadth experience and the performance of foreign subsidiaries.In addition,this paper also selects the sample enterprises of manufacturing industry for in-depth discussion.The results show that there are similar mechanisms among other variables,except that the cultural distance does not significantly moderate the relationship between the international depth experience and the performance of foreign subsidiaries.The research results of this paper enrich the relevant research on the factors affecting the performance of foreign subsidiaries,broaden and deepen the theoretical perspective of the process and results of enterprises internationalization,and also verify the hypothesis that more experience is not better.In addition,by introducing the concept of diminishing margin in an exploratory way,this paper studies the relationship between the international depth experience and the performance of foreign subsidiaries,which increases the applicability and extension of the future research from the method level.