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Although it has been suggested that innovation has significant consequences for a firm's economic performance, the past empirical findings are mixed, not always confirming this proposition. Extending previous research, this study demonstrates that the reason for previously conflicting results may be an incomplete understanding of the factors influencing the innovation-performance relationship. We argue that not all firms can reap rewards from innovation. Rather, we suggest that firms need to have a sufficient degree of internationalization, i.e. be active in many markets, to capture successfully the fruits of innovation. Initially, the study offers a theoretical framework that explains how and why a higher degree of internationalization, by affecting both innovative capacity and a number of appropriability factors, influences the effects of innovation. Then, utilizing firm-level data, the study empirically tests this proposition. The results confirm that internationalization enhances a firm's capacity to improve performance through innovation. However, they also show that firms are unable to benefit from innovation if their international activity is below a threshold level.

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Although prior research has highlighted the importance of academic collaborations in enhancing firms' innovation performance, it has largely focused on developed countries. As a result, it remains unclear how academic collaborations influence innovation in emerging countries, which differ fundamentally in their institutional environment. We contribute to this literature by examining how collaborations with universities and research institutes influence the ability of Chinese emerging market enterprises (EMEs) to develop innovations. Our analysis challenges the assumption of institutional homogeneity within a given country, showing that institutions evolve in different ways across sub-national Chinese regions. This uneven institutional evolution affects the enforcement of intellectual property rights (IPR), the level of international openness, the quality of universities and research institutes across regions and, consequently, how much Chinese EMEs benefit from academic collaborations.Our findings reveal that sub-national institutional variations have a profound impact on the relationship between academic collaborations and firms' innovation performance, show that some established assumptions are not valid in emerging countries such as China, and offer insights into how EMEs enhance their innovation performance.

While the competitive advantages of firms from developed economies are well understood, knowledge of the advantages that enable emerging market enterprises (EMEs) to expand overseas remains limited. Our analysis goes beyond theorizing that focused on firm resources, enhancing the understanding of how EMEs expand abroad by internalizing home country institutional advantages that extend beyond the firm boundaries. More specifically, we examine how the state and institutional idiosyncrasies in the home country help EMEs internationalize. We demonstrate that state ownership has a strong independent effect on the international expansion of EMEs. This effect, however, is contingent upon firms' own resources and other location-and industry-specific forces pertaining to the market orientation of each sub-national region and the institutional policies within a given industry.