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Financial Environment, City Distance and International Operation of Chinese Enterprises

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  • Chuan Lin
  • Jingjing Luo

Abstract

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.

Suggested Citation

  • Chuan Lin & Jingjing Luo, 2018. "Financial Environment, City Distance and International Operation of Chinese Enterprises," International Journal of Business Administration, International Journal of Business Administration, Sciedu Press, vol. 9(6), pages 61-68, November.
    • Handle: RePEc:jfr:ijba11:v:9:y:2018:i:6:p:61-68
    DOI: 10.5430/ijba.v9n6p61
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