We explore the performance implications of location choices Chinese multinational corporations (MNCs)make. Drawing on internalization and organizational learning theories, we find that developing country MNCs entering other developing countries experience a positive effect on their performance in theimmediate term that, however, erodes over time because of the decay in their initial internalizedadvantages. Conversely, MNCs entering developed countries experience a negative effect on theirimmediate-term performance but a boost in performance over time because of the gradual realization oflearning benefits. Our analyses of internationalization and performance of 207 Chinese-listed MNCsbetween 1992 and 2005 corroborate our key predictions.