Learning, foreign operations and operating performance

We study the effect of a firm's internationalization on operating performance using data on publicly listed non-financial firms in Japan during 1990–2019. The proportion of international firms in the sample has been around 30–40% during the sample period. We show that internationalization is not associated with operating performance. Our evidence shows that international firms do not perform better or worse than matched domestic firms with similar firm characteristics. We also find that the relation between international experience and operating performance is U-shaped. These results have wide-ranging implications for international investment strategies. •We analyze a sample of non-financial firms listed in Japan during 1990–2019.•Internationalization is not associated with operating performance.•The performance of international firms is on par with that of matched domestic firms with similar firm characteristics.•The effect of international experience on operating performance is U-shaped.•International experience has a positive non-linear effect on industry-adjusted operating performance.