해외자회사를 활용한 국제화 전략이 기업성과에 미치는 영향

This study measures the degree of internationalization of Korean firms based on the corporate disclosure on foreign subsidiaries and investigate its association with corporate performance. Although the research interest in the corporate internationalization strategies has grown with increasing level of foreign direct investment of many global companies, the relevant research results have not been consistent. In general, multinational enterprises have advantage to allocate corporate resources worldwide in efficient manner and thus enhance productivity, but on the other hand may suffer inefficiency as a result of additional cost burden in controling its numerous business entities all over the world. Further, the relationship between the internationalization and the corporate performance may not be linear but interlinked in a comprehensive manner, which should be empirically tested considering the specific characteristics of the countries where the relevant business entities reside. As for Korean firms, the lack of publicly available information on the foreign subsidiaries has prevented an accurate analysis of the internationalization strategy. In this regard, researchers have long been suggesting the need of developing a reliable measure of corporate internationalization for Korean firms. In response, this study presents new methodology to measure the degree of corporate internationalization. Specifically, this study measures the degree of corporate internationalization based on the ratio of foreign subsidiaries’ assets to total assets, using the detailed information on subordinate companies subject to consolidation as disclosed under the annual business reports of Korean listed firms, which has become available since 2011 as a result of the adoption of the International Financial Reporting Standards. I also measure the corporate business performance in terms of the return-on-assets and the return-on-sales. As a primary test, this study investigates whether the corporate internationalization is positively linearly associated with firm performance. The empirical test results show no significant relationship between the level of internationalization and the firm performance. However, the results present a significant effect of the economic environment of the foreign subsidiary’s residence country on the corporate performance. That is, firms with foreign subsidiaries in rapidly developing countries have relatively high level of profitability. This association is more pronounced in the firms for which the majority of foreign subsidiaries are located in China, whereas firms with subsidiaries in advanced countries such as the U.S. shows relatively low profitability. The findings are consistent with prior research to the effect that the association between internationalization and corporate performance is not necessarily linear but can be affected by multiple firm environments. Especially, the empirical test results show that the economic circumstances of the countries of foreign subsidiaries may substantially influence the entire firm performance. This study contributes to the literature by providing new test results on the corporate internationalization and firm performance using the disclosure on foreign subsidiaries under the consolidated financial statements, and thereby suggesting a new reliable empirical methodology to overcome the limitation of prior studies. Additionally, this study indicates that the impact of corporate internationalization on firm performance is not unilaterally determined but can be affected by multiple variants including the foreign country characteristics, which provides insight on firms’ decision making on internationalization strategies.