Open AccessFinancial Environment, City Distance and International Operation of Chinese Enterprises
Author(s) -
Chuan Lin,
Jingjing Luo
Publication year - 2018
Publication title -
international journal of business administration
Language(s) - English
Resource type - Journals
eISSN - 1923-4015
pISSN - 1923-4007
DOI - 10.5430/ijba.v9n6p61
Subject(s) - business , finance , sample (material) , jurisdiction , global environmental analysis , positive correlation , marketing , medicine , chemistry , chromatography , political science , law
This paper uses the 9741 internationally-operated Chinese companies and their matched companies in Shanghai and Shenzhen A-shares as a sample to empirically examine the relationship between financial environment, distance and international operation. First of all, the study found that there is a significant positive correlation between the financial environment and the international operation of the company. In other words, the better the financial environment in which the company is located, the more likely it is that the company will conduct international operations. Second, there is also a significant positive correlation between distances and international operations, which means that the closer the geographical location of the registered place of a company and the central city of the province, the more likely it is that the enterprises within the jurisdiction are operating internationally. Furthermore, the urban distance can produce a ‘regulatory effect’ between the financial environment and the international operation of the enterprise. That is the positive correlation between the financial environment and the international operation of the enterprise depends on the ‘city distance’. Considering the influence of ‘city distance’, the positive impact of the financial environment on international operations is even more pronounced.