The internationalization of firms and the relation to plant and firm performance is the unifying theme of this doctoral thesis. Chapter 2, "The effects of cross-border mergers and acquisitions on the acquirers' domestic performance: firm-level evidence", provides empirical evidence on the effects of M&A on the investing firms' domestic performance in the U.K. and France. A new firm-level dataset is built up that combines a global M&A database with balance sheet data for the years 2000 to 2007. Combining matching techniques with a difference-in-differences estimator, cross-border M&A are shown to boost on average acquirers' domestic sales and investment, and cross-border deals do not appear to be accompanied by a downsizing of the domestic labor force in neither of both countries. Further, acquisitions in knowledge-intensive industries lead to improvements in domestic productivity. The results display some heterogeneity across industries and types of acquisitions, suggesting a connection between the motives for international M&As and their resulting effects. Chapter 3, "Productivity and the internationalization of firms: cross-border acquisitions versus greenfield investments", extends the literature on the determinants of international activity at the firm level towards cross-border acquisitions and greenfield investments as different modes of FDI. Using a rich dataset of British firms, multinationals (MNEs) are shown to be characterized by higher productivity levels than exporters on average. However, the productivity ranking does not hold within all types of industries and across all modes of foreign direct investment. In line with theoretical predictions it matters whether multinational firms engage abroad via greenfield investments or cross-border acquisitions. Cross-border deals involve the most productive firms in sectors with a high share of intangible assets, but the least productive group of all internationally active firms in other industries. Chapter 4, "Who buys who in international trade" makes use of a newly constructed dataset that combines information on both European acquirer and target firms in domestic and cross-border M&A deals with a large group of control firms that are not involved in any acquisition activity. The direct link between the two sides of acquisitions contributes to two research questions. First, the complete productivity ranking of acquirer, target, and domestic firms can be described. In contrast to previous work, the self-selection mechanism of firms into international acquisitions and the cherry-picking of suitable target firms are analyzed simultaneously and for a cross-country dataset. Second, the M&A literature on "who buys who" is extended towards cross-border acquisitions. The distribution of the performance advantage of acquiring firms in direct comparison to their chosen targets in the foreign country is analyzed. Systematic differences in the results show up for domestic and cross-border deals. Chapter 5, titled "Cultural diversity and plant productivity", turns to the analysis of the effects of an internationalized labor force. It extends the literature on the effects of cultural diversity on the economic performance as it analyzes two channels through which a culturally diverse workforce can have an impact on the productivity at the establishment level. The composition of the plants' own workforce, where native and non-native workers from different nations interact directly, influences plant efficiency, but the diversification of the regional workforce at the plants' location can also generate knowledge spillovers. Complementarities in skills and problem-solving abilities stemming from different cultural backgrounds might improve the plants' measured performance, while higher transaction costs due to communication problems probably decrease plant efficiency. Production functions augmented with detailed plant and region workforce information are estimated for a comprehensive sample of German establishments. Potential endogeneity problems are addressed in a System GMM framework. We find positive impacts of a culturally diverse region workforce in particular for small, technology-intensive plants, and in the service sector. The diversity of the own workforce additionally increases the productivity of large, manufacturing plants.