The impact of the internationalization strategy of MNEs on innovation performance: the moderating role of digital transformation

Purpose This study aims to fill the research gap on how internationalization strategies (depth vs breadth) influence the innovation performance of multinational enterprises (MNEs) in the digitalization age and explore how digital transformation impacts the link of MNEs internationalization and innovation performance. Design/methodology/approach The regression analysis is conducted to test the proposed hypotheses. Data are collected from the annual reports of Chinese listed MNEs. A dataset containing 2,232 firm-year observations of 757 MNEs from 2007 to 2018. Findings The findings show that internationalization depth strategy positively affects the innovation performance of MNEs, while internationalization breadth strategy exerts negative influence. Furthermore, digital transformation strengthens the positive effect of internationalization depth strategies on innovation performance and mitigates the negative effect of internationalization breadth strategies on MNEs’ innovation performance. Originality/value This study reveals the distinct effects of internationalization depth and internationalization breadth on innovation performance of MNEs and uncovers the moderating role of digital transformation, which provides a more complete theoretical framework for the impact of internationalization (depth vs breadth) strategy on innovation performance in the digital age. This study also extends the theoretical insights of organizational learning in the field of internationalization and digitalization.