Trade Policy Uncertainty, Government Subsidies, and the Degree of Corporate Internationalization

Based on data from Chinese A-share listed firms during 2014–2023, this study distinguishes between objective trade policy uncertainty (OPU) and subjective perceived trade policy uncertainty (SPU), and systematically examines the effects of these uncertainty dimensions on the breadth (IB) and depth (ID) of firm internationalization, as well as the underlying mechanisms. The moderating role of government subsidies is also investigated. The results indicate that OPU significantly enhances both IB and ID, whereas SPU suppresses IB but promotes ID. Heterogeneity analyses reveal that these effects are more pronounced among high-tech firms and large enterprises. The moderation analysis further shows that government subsidies strengthen the positive impact of OPU on IB and ID, mitigate the negative effect of SPU on IB, and amplify its positive effect on ID. Mechanism tests demonstrate that OPU indirectly promotes IB and ID by enhancing shareholder internationalization, executives’ international experience, and the international embeddedness of R&D activities. In contrast, SPU reshapes the structure of firms’ internationalization capabilities through the same channels, thereby indirectly inhibiting IB while facilitating ID. This study provides novel empirical evidence and policy insights for understanding the transmission mechanisms through which trade policy uncertainty influences firm internationalization behavior.