IDEAS home Printed from https://ideas.repec.org/a/eee/iburev/v31y2022i3s0969593121001669.html
   My bibliography  Save this article

Performance feedback and export intensity of Chinese private firms: Moderating roles of institution-related factors

Author

Listed:
  • Dong, Meitong
  • Wang, Liwen
  • Yang, Defeng
  • Zhou, Kevin Zheng

Abstract

Building on the behavioral theory of the firm and institutional view, we examine how performance feedback (i.e., a focal firm’s performance relative to its industry peers) affects export intensity and how institution-related factors moderate this relationship. Using a sample of Chinese private manufacturing firms, we find that positive performance feedback lowers export intensity while the relationship between negative performance feedback and export intensity is insignificant. Moreover, outperforming firms are likely to decrease their export intensity even more when they are located in regions of better institutional development or have political connections. Underperforming firms with political connections tend to increase their export intensity. These findings enrich our understanding of the export behavior of emerging market firms.

Suggested Citation

  • Dong, Meitong & Wang, Liwen & Yang, Defeng & Zhou, Kevin Zheng, 2022. "Performance feedback and export intensity of Chinese private firms: Moderating roles of institution-related factors," International Business Review, Elsevier, vol. 31(3).
    • Handle: RePEc:eee:iburev:v:31:y:2022:i:3:s0969593121001669
    DOI: 10.1016/j.ibusrev.2021.101948
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969593121001669
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ibusrev.2021.101948?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mike W Peng & Denis Y L Wang & Yi Jiang, 2008. "An institution-based view of international business strategy: a focus on emerging economies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(5), pages 920-936, July.
    2. Estrin, Saul & Meyer, Klaus E. & Wright, Mike & Foliano, Francesca, 2008. "Export propensity and intensity of subsidiaries in emerging economies," International Business Review, Elsevier, vol. 17(5), pages 574-586, October.
    3. Ilya Okhmatovskiy, 2010. "Performance Implications of Ties to the Government and SOEs: A Political Embeddedness Perspective," Journal of Management Studies, Wiley Blackwell, vol. 47(6), pages 1020-1047, September.
    4. Danqing Wang & Zhitao Zhu & Shuo Chen & Xiaowei Rose Luo, 2021. "Running out of steam? A political incentive perspective of FDI inflows in China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(4), pages 692-717, June.
    5. Xiao, Shufeng (Simon) & Park, Byung Il, 2018. "Bring institutions into FDI spillover research: Exploring the impact of ownership restructuring and institutional development in emerging economies," International Business Review, Elsevier, vol. 27(1), pages 289-308.
    6. Zhihua Cheng & Feng Wang & Christine Keung & Yongxiu Bai, 2017. "Will Corporate Political Connection Influence the Environmental Information Disclosure Level? Based on the Panel Data of A-Shares from Listed Companies in Shanghai Stock Market," Journal of Business Ethics, Springer, vol. 143(1), pages 209-221, June.
    7. Lv, David Diwei & Chen, Weihong & Zhu, Hang & Lan, Hailin, 2019. "How does inconsistent negative performance feedback affect the R&D investments of firms? A study of publicly listed firms," Journal of Business Research, Elsevier, vol. 102(C), pages 151-162.
    8. Gerald Yong Gao & Janet Y Murray & Masaaki Kotabe & Jiangyong Lu, 2010. "A “strategy tripod” perspective on export behaviors: Evidence from domestic and foreign firms based in an emerging economy," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(6), pages 1090-1091, August.
    9. Gerald Yong Gao & Janet Y Murray & Masaaki Kotabe & Jiangyong Lu, 2010. "A “strategy tripod” perspective on export behaviors: Evidence from domestic and foreign firms based in an emerging economy," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(3), pages 377-396, April.
    10. Geiler, Philipp & Renneboog, Luc, 2015. "Are female top managers really paid less?," Journal of Corporate Finance, Elsevier, vol. 35(C), pages 345-369.
    11. Kenneth G Huang & Jiatao Li, 2019. "Adopting knowledge from reverse innovations? Transnational patents and signaling from an emerging economy," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(7), pages 1078-1102, September.
    12. Jiangyong Lu & Bin Xu & Xiaohui Liu, 2009. "The Effects of Corporate Governance and Institutional Environments on Export Behaviour in Emerging Economies," Management International Review, Springer, vol. 49(4), pages 455-478, September.
    13. Kim, Jae-jin & Hemmert, Martin, 2016. "What drives the export performance of small and medium-sized subcontracting firms? A study of Korean manufacturers," International Business Review, Elsevier, vol. 25(2), pages 511-521.
    14. Shi, Xinzheng & Xu, Zhufeng, 2018. "Environmental regulation and firm exports: Evidence from the eleventh Five-Year Plan in China," Journal of Environmental Economics and Management, Elsevier, vol. 89(C), pages 187-200.
    15. Jiang, Guoliang Frank & Holburn, Guy L.F., 2018. "Organizational performance feedback effects and international expansion," Journal of Business Research, Elsevier, vol. 90(C), pages 48-58.
    16. Weilei (Stone) Shi & Sunny Li Sun & Mike W. Peng, 2012. "Sub-National Institutional Contingencies, Network Positions, and IJV Partner Selection," Journal of Management Studies, Wiley Blackwell, vol. 49(7), pages 1221-1245, November.
    17. Agnihotri, Arpita & Bhattacharya, Saurabh, 2015. "Determinants of export intensity in emerging markets: An upper echelon perspective," Journal of World Business, Elsevier, vol. 50(4), pages 687-695.
    18. Xie, En & Huang, Yuanyuan & Stevens, Charles E. & Lebedev, Sergey, 2019. "Performance feedback and outward foreign direct investment by emerging economy firms," Journal of World Business, Elsevier, vol. 54(6), pages 1-1.
    19. Pasi Kuusela & Thomas Keil & Markku Maula, 2017. "Driven by aspirations, but in what direction? Performance shortfalls, slack resources, and resource-consuming vs. resource-freeing organizational change," Strategic Management Journal, Wiley Blackwell, vol. 38(5), pages 1101-1120, May.
    20. Martínez-Zarzoso, Inmaculada & Johannsen, Florian, 2017. "Monetary uncertainty and trade in Eastern Europe and Central Asia: A firm-level analysis," International Business Review, Elsevier, vol. 26(3), pages 476-490.
    21. Yuan Yang & Min Tang, 2020. "Finding the Ethics of “Red Capitalists”: Political Connection and Philanthropy of Chinese Private Entrepreneurs," Journal of Business Ethics, Springer, vol. 161(1), pages 133-147, January.
    22. Akie Iriyama & Rajiv Kishore & Debabrata Talukdar, 2016. "Playing dirty or building capability? Corruption and HR training as competitive actions to threats from informal and foreign firm rivals," Strategic Management Journal, Wiley Blackwell, vol. 37(10), pages 2152-2173, October.
    23. Levinthal, Daniel & March, James G., 1981. "A model of adaptive organizational search," Journal of Economic Behavior & Organization, Elsevier, vol. 2(4), pages 307-333, December.
    24. Jie Wu & Hongxin Zhao, 2015. "The Dual Effects of State Ownership on Export Activities of Emerging Market Firms: An Inducement–Constraint Perspective," Management International Review, Springer, vol. 55(3), pages 421-451, June.
    25. Krammer, Sorin M.S. & Strange, Roger & Lashitew, Addisu, 2018. "The export performance of emerging economy firms: The influence of firm capabilities and institutional environments," International Business Review, Elsevier, vol. 27(1), pages 218-230.
    26. Pino G. Audia & Henrich R. Greve, 2006. "Less Likely to Fail: Low Performance, Firm Size, and Factory Expansion in the Shipbuilding Industry," Management Science, INFORMS, vol. 52(1), pages 83-94, January.
    27. Song, Lili & van Geenhuizen, Marina, 2014. "Port infrastructure investment and regional economic growth in China: Panel evidence in port regions and provinces," Transport Policy, Elsevier, vol. 36(C), pages 173-183.
    28. Zhenzhen Xie & Jiatao Li, 2018. "Exporting and innovating among emerging market firms: The moderating role of institutional development," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(2), pages 222-245, February.
    29. Lin, Wen-Ting, 2014. "How do managers decide on internationalization processes? The role of organizational slack and performance feedback," Journal of World Business, Elsevier, vol. 49(3), pages 396-408.
    30. Kiyohiko Ito & Vladimir Pucik, 1993. "Abstract," Strategic Management Journal, Wiley Blackwell, vol. 14(1), pages 61-75, January.
    31. Murat Tarakci & Nüfer Yasin Ateş & Steven W. Floyd & Yoojung Ahn & Bill Wooldridge, 2018. "Performance feedback and middle managers’ divergent strategic behavior: The roles of social comparisons and organizational identification," Strategic Management Journal, Wiley Blackwell, vol. 39(4), pages 1139-1162, April.
    32. Allen Dennis & Ben Shepherd, 2011. "Trade Facilitation and Export Diversification," The World Economy, Wiley Blackwell, vol. 34(1), pages 101-122, January.
    33. Yan Zhang & Haiyang Li & Yu Li & Li‐An Zhou, 2010. "FDI spillovers in an emerging market: the role of foreign firms' country origin diversity and domestic firms' absorptive capacity," Strategic Management Journal, Wiley Blackwell, vol. 31(9), pages 969-989, September.
    34. Vibha Gaba & John Joseph, 2013. "Corporate Structure and Performance Feedback: Aspirations and Adaptation in M-Form Firms," Organization Science, INFORMS, vol. 24(4), pages 1102-1119, August.
    35. Sihai Li & Huiying Wu & Xianzhong Song, 2017. "Principal–Principal Conflicts and Corporate Philanthropy: Evidence from Chinese Private Firms," Journal of Business Ethics, Springer, vol. 141(3), pages 605-620, March.
    36. Yang, Kaiyuan & Ma, Pengcheng & Cui, Lin, 2021. "Subnational corruption and foreign firms’ performance: Evidence from China," Journal of Business Research, Elsevier, vol. 123(C), pages 106-116.
    37. Du, Jialin & Bai, Tao & Chen, Stephen, 2019. "Integrating corporate social and corporate political strategies: Performance implications and institutional contingencies in China," Journal of Business Research, Elsevier, vol. 98(C), pages 299-316.
    38. İpek, İlayda & Bıçakcıoğlu-Peynirci, Nilay, 2020. "Export market orientation: An integrative review and directions for future research," International Business Review, Elsevier, vol. 29(4).
    39. Cheng, Louis T.W. & Chan, Ricky Y.K. & Leung, T.Y., 2010. "Management demography and corporate performance: Evidence from China," International Business Review, Elsevier, vol. 19(3), pages 261-275, June.
    40. Deng, Ping & Zhang, Shuo, 2018. "Institutional quality and internationalization of emerging market firms: Focusing on Chinese SMEs," Journal of Business Research, Elsevier, vol. 92(C), pages 279-289.
    41. Jie Wu & Zhenzhong Ma, 2016. "Export Intensity and MNE Customers’ Environmental Requirements: Effects on Local Chinese Suppliers’ Environment Strategies," Journal of Business Ethics, Springer, vol. 135(2), pages 327-339, May.
    42. Balagopal Vissa & Henrich R. Greve & Wei-Ru Chen, 2010. "Business Group Affiliation and Firm Search Behavior in India: Responsiveness and Focus of Attention," Organization Science, INFORMS, vol. 21(3), pages 696-712, June.
    43. James G. March & Zur Shapira, 1987. "Managerial Perspectives on Risk and Risk Taking," Management Science, INFORMS, vol. 33(11), pages 1404-1418, November.
    44. Kahiya, Eldrede T., 2018. "Five decades of research on export barriers: Review and future directions," International Business Review, Elsevier, vol. 27(6), pages 1172-1188.
    45. Luke Rhee & William Ocasio & Tae-Hyun Kim, 2019. "Performance Feedback in Hierarchical Business Groups: The Cross-Level Effects of Cognitive Accessibility on R&D Search Behavior," Organization Science, INFORMS, vol. 30(1), pages 51-69, February.
    46. Olena Ivus, 2015. "Does stronger patent protection increase export variety? Evidence from US product-level data," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 46(6), pages 724-731, August.
    47. Xufei Ma & Tony W Tong & Markus Fitza, 2013. "How much does subnational region matter to foreign subsidiary performance? Evidence from Fortune Global 500 Corporations’ investment in China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 44(1), pages 66-87, January.
    48. Yi, Jingtao & Wang, Chengqi & Kafouros, Mario, 2013. "The effects of innovative capabilities on exporting: Do institutional forces matter?," International Business Review, Elsevier, vol. 22(2), pages 392-406.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Qingtao & Bai, Xuan & Li, Julie Juan, 2023. "Achieving value co-creation through cooperation in international joint ventures: A two-level perspective," International Business Review, Elsevier, vol. 32(1).
    2. Zhou, Luoqiong & Ren, Shenggang & Du, Lei & Tang, Fei & Li, Ronghua, 2023. "Is environmental labeling certification a “green passport” for firm exports in emerging economies? Evidence from China," International Business Review, Elsevier, vol. 32(5).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhang, Tingting (Grace) & You, Yu, 2021. "Scale or efficiency? Performance shortfall and engagement in production activities of foreign subsidiaries in China," Journal of International Management, Elsevier, vol. 27(1).
    2. Krammer, Sorin M.S. & Strange, Roger & Lashitew, Addisu, 2018. "The export performance of emerging economy firms: The influence of firm capabilities and institutional environments," International Business Review, Elsevier, vol. 27(1), pages 218-230.
    3. Weilei (Stone) Shi & Sunny Li Sun & Daying Yan & Zhu Zhu, 2017. "Institutional fragility and outward foreign direct investment from China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(4), pages 452-476, May.
    4. Zhou, Luoqiong & Ren, Shenggang & Du, Lei & Tang, Fei & Li, Ronghua, 2023. "Is environmental labeling certification a “green passport” for firm exports in emerging economies? Evidence from China," International Business Review, Elsevier, vol. 32(5).
    5. Cheng, Lulu & Xie, En & Fang, Junyi & Mei, Nan, 2022. "Performance feedback and firms’ relative strategic emphasis: The moderating effects of board independence and media coverage," Journal of Business Research, Elsevier, vol. 139(C), pages 218-231.
    6. Shufeng Simon Xiao & Yong Kyu Lew & Byung Il Park, 2019. "‘2R-Based View’ on the Internationalization of Service MNEs from Emerging Economies: Evidence from China," Management International Review, Springer, vol. 59(4), pages 643-673, August.
    7. Buitrago R., Ricardo E. & Barbosa Camargo, María Inés, 2021. "Institutions, institutional quality, and international competitiveness: Review and examination of future research directions," Journal of Business Research, Elsevier, vol. 128(C), pages 423-435.
    8. Serigne Bassirou LO, 2021. "Effet de la corruption sur les exportations des entreprises manufacturières africaines," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 54, pages 9-30.
    9. Juan M. Gil-Barragan & María José López-Sánchez, 2021. "The Fast Lane of Internationalization of Latin American SMEs: A Location-Based Approach," Sustainability, MDPI, vol. 13(6), pages 1-20, March.
    10. Xiao, Shufeng & Tian, Xiaocong, 2023. "Performance feedback and location choice of foreign direct investment," International Business Review, Elsevier, vol. 32(4).
    11. Kent Ngan-Cheung Hui & Yuanyuan Gong & Qi Cui & Naipeng Jiang, 2022. "Foreign investment or divestment as a near-term solution to performance shortfalls? The moderating role of vicarious learning," Asia Pacific Journal of Management, Springer, vol. 39(4), pages 1481-1509, December.
    12. Deb, Palash & David, Parthiban & O'Brien, Jonathan P. & Duru, Augustine, 2019. "Attainment discrepancy and investment: Effects on firm performance," Journal of Business Research, Elsevier, vol. 99(C), pages 186-196.
    13. Ref, Ohad & Feldman, Naomi E. & Iyer, Dinesh N & Shapira, Zur, 2021. "Entry into new foreign markets: Performance feedback and opportunity costs," Journal of World Business, Elsevier, vol. 56(6).
    14. Yadong Luo & Huan Zhang & Juan Bu, 2019. "Developed country MNEs investing in developing economies: Progress and prospect," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(4), pages 633-667, June.
    15. Ye, Zhiqiang & Zhang, Fangfang & Zhang, Shunming, 2021. "Export effect and influence mechanism of foreign ownership," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 258-276.
    16. Megan Min Zhang & Paul W. Beamish, 2019. "An institutional response model to economic liberalization: Japanese MNEs’ ownership choices in China," Asia Pacific Journal of Management, Springer, vol. 36(1), pages 33-59, March.
    17. Mengmeng Wang & Shufeng Simon Xiao & Sang Hyun Han, 2023. "Exploring the double-edged sword effect of outward FDI spillovers on domestic firms’ productivity in an emerging market," Asian Business & Management, Palgrave Macmillan, vol. 22(1), pages 275-299, February.
    18. Qi, Guoyou & Zou, Hailiang & Xie, Xuemei & Meng, Xiaohua & Fan, Tijun & Cao, Yuanhe, 2020. "Obedience or escape: Examining the contingency influences of corruption on firm exports," Journal of Business Research, Elsevier, vol. 106(C), pages 261-272.
    19. Martínez-Noya, Andrea & García-Canal, Esteban, 2021. "Innovation performance feedback and technological alliance portfolio diversity: The moderating role of firms’ R&D intensity," Research Policy, Elsevier, vol. 50(9).
    20. Xu, Kai & Hitt, Michael A. & Brock, David & Pisano, Vincenzo & Huang, Lulu S.R., 2021. "Country institutional environments and international strategy: A review and analysis of the research," Journal of International Management, Elsevier, vol. 27(1).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:iburev:v:31:y:2022:i:3:s0969593121001669. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.