Negative performance feedback, CEO power and internationalization

We examine the critical role of CEO power in influencing the firm's internationalization in response to negative performance feedback. Firms with CEOs who possess strong ownership and expert power may adopt a self-enhancement approach avoiding strategic changes within the firm such as pursuing internationalization to address a performance shortfall. In contrast, those with CEOs who wield significant structural and prestige power may adopt a problem-solving approach using internationalization as a solution. Positive performance prospects, as identified by business analysts, intensify these patterns. Data from 462 newly listed public companies in China from 2009 to 2020 support our hypotheses. We conclude that firms may internationalize to address domestic performance shortfalls rather than to exploit advantages in overseas markets.