Interdependency between internationalization, firm performance, and corporate governance

Abstract

The purpose of this research was to identify the interdependency between internationalization, performance and corporate governance. Data used by this paper were from financial statement information of manufacturing companies listed on Indonesian Stock Exchange over period [2011][2012][2013][2014][2015]. Pooling data were applied for a sample which contains 84 manufacturing companies with five years data. This paper also applied Two Stages Regression as a statistical tool to identify the relationship between these three main variables. This research found significant interdependency relations between internationalization, performance, and corporate governance of manufacturing companies listed on Indonesia Stock Exchange.

Environmental, Social and Governance Performance of Chinese Multinationals: A Comparison of State- and Non-State-Owned Enterprises

“…The performance of companies is also affected when they go global. Firms are affected by the performance at three levels during internationalization, as mentioned by Muliyanto and Marciano [58]. There is a negative association between internationalization and firm performance at the first level of internationalization.…”

“…At the third and highest level, firm performance is decreased again because of the increase in complexity due to internationalization. Firm performance is taken as a benchmark for companies, and they try to improve their performance using different governance methods [58]. Therefore, we can say that internationalization affects the corporate governance of companies.…”

“…The research was conducted on German family-owned enterprises, and it was found that lower family participation in corporate structure leads to the better implementation of internationalization of German companies. Muliyanto and Marciano [58] investigated the interdependence of corporate governance, performance, and internationalization. They created three models to test the relationship and found different results for each model.…”