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Role of Domestic Financial Reforms and Internationalization of Non-Financial Transnational Firms: Evidence from the Chinese Market

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  • Muhammad Saad Baloch

    (Department of Management Sciences, Comsats University, Islamabad 45550, Pakistan)

  • Abubakr Saeed

    (Department of Management Sciences, Comsats University, Islamabad 45550, Pakistan)

  • Ishtiaq Ahmed

    (Faculty of Economics and Business, Institute of Accounting and Finance, University of Debrecen, Ihrig Károly PhD School, 4028 Debrecen, Hungary)

  • Judit Oláh

    (Faculty of Economics and Business, Institute of Applied Informatics and Logistics, University of Debrecen, 4032 Debrecen, Hungary)

  • József Popp

    (Faculty of Economics and Business, Institute of Sectoral Economics and Methodology, University of Debrecen, 4032 Debrecen, Hungary)

  • Domicián Máté

    (Institute of Accounting and Finance, Controlling Department, Faculty of Economics and Business, University of Debrecen, 4028 Debrecen, Hungary)

Abstract

The successful internationalization process of Chinese firms which enhances the sustainability of the Chinese economy receives massive research attention. Studies emphasize that firm’s motives and institutional voids play a pivotal role in getting benefits from the internationalization process, but the factors that initiated this process have been overlooked. The objective of this study is to explore the impact of those institutional factors which initiated the internationalization process. This study reveals that institutional factors of cross listing and increased financial availability induced the internationalization process of Chinese firms. Using the financial data of non-financial firms for the period of 2005–2015, we demonstrate that the domestic financial reforms initiated the internationalization process that helps Chinese economies to achieve sustainable economic development. The study also finds that state-ownership helped firms to gain more from increased financial availability than the stand-alone firms. The study concludes that the open business environment helped firms to survive and sustain the international pressure successfully and maintain their sustainable performance.

Suggested Citation

  • Muhammad Saad Baloch & Abubakr Saeed & Ishtiaq Ahmed & Judit Oláh & József Popp & Domicián Máté, 2018. "Role of Domestic Financial Reforms and Internationalization of Non-Financial Transnational Firms: Evidence from the Chinese Market," Sustainability, MDPI, vol. 10(11), pages 1-16, October.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:11:p:3847-:d:177854
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