The active participation of Chinese manufacturing enterprises in overseas investment is an important way to enhance the international influence of Chinese manufacturing and promote the development pattern of “Dual Circulation”. This paper uses the OFDI data of Chinese manufacturing listed companies to empirically examine the effect and mechanism of the industrial and regional dispersion of companies’ overseas direct investment on business performance. The study found that: First, the improvement of the industrial or regional diversification of overseas investment of listed manufacturing companies has significantly reduced business performance. Second, the negative impact is more pronounced in non-state-owned and high-tech enterprises. Third, rising operating costs and declining resource utilization efficiency are two important mechanisms for the diversification of overseas investment to lead to a decline in corporate operating performance. According to the research conclusions, this paper believes that rationally weighing the cost-benefit of enterprise diversification, increasing innovation to enhance the core competitiveness, and the government’s introduction of industrial policies to guide investment trends can improve the OFDI efficiency and rationality.