The Impact of Vertical and Horizontal Network Embeddedness on Foreign Subsidiary Performance in Korea

2019 ◽  
Vol 31 (4) ◽  
pp. 55-77
Author(s):  
Young-Ryeol Park ◽  
Min Son Jung
Keyword(s):  
Foreign Subsidiary ◽  
Subsidiary Performance ◽  
Network Embeddedness ◽  
The Impact ◽  
Horizontal Network

Determinants of the level of foreign subsidiaries’ localization of Korean MNCs and performance in China

2017 ◽  
Vol 21 (1) ◽  
pp. 2-21
Author(s):  
Byoung-Goo Kim ◽  
Gyu-Bae Kim
Keyword(s):  
Survey Data ◽  
Empirical Analysis ◽  
Corporate Culture ◽  
Business Strategy ◽  
Local Network ◽  
Foreign Subsidiary ◽  
Foreign Subsidiaries ◽  
Content Type ◽  
Network Embeddedness ◽  
The Relationship

Purpose The purpose of this paper is to empirically analyze what effects the headquarters’ (HQ) business strategy and corporate culture, the local network embeddedness of the foreign subsidiary, and HQ-subsidiary communication have on the staff localization of foreign subsidiaries. The authors carry out empirical analysis on how localization of foreign subsidiaries ultimately affects the performance of foreign subsidiaries. Design/methodology/approach This study is an empirical analysis on the determinants of staff localization and the relationship between staff localization and corporate performance. In this study, the five hypotheses were proposed and tested using survey data. The authors randomly selected a total of 800 companies as subjects and conducted a survey. The final 222 survey data including HQs and subsidiaries were used for empirical analysis. The statistical analyses such as reliability test, factor analysis and regression were used. Findings This study shows that there was a higher level of staff localization by the foreign subsidiary when the investment goal was market-oriented investment, the Korean foreign subsidiary had stronger local network embeddedness and there was better HQ-subsidiary communication. In addition, the relationship between localization and subsidiary performance shows an inverted U-shape. Such results will give various implications to companies. Originality/value The research that takes a multilayered consideration on factors of the HQ, subsidiaries, and the HQ-subsidiary relationship is rare. To overcome such limitations, this study carried out a survey in order to find more in-depth decision factors. Specifically, this study analyzed the effects of three large aspects of investment goals and corporate culture from the aspect of the HQ, local network embeddedness from the aspect of foreign subsidiaries, and the level of HQ-subsidiary communication from the aspect of HQ-subsidiary relations, and how they affect staff localization.

The impact of within-country and within-firm factors on Japanese foreign subsidiary performance during economic crisis

2017 ◽  
Vol 9 (3) ◽  
pp. 190-205 ◽  
Author(s):  
Matheus Baldo Cordeiro ◽  
Mario Henrique Ogasavara ◽  
Gilmar Masiero
Keyword(s):  
Economic Crisis ◽  
Fixed Effects ◽  
Multinational Firms ◽  
Negative Impact ◽  
Foreign Subsidiaries ◽  
Productivity Measurement ◽  
Subsidiary Performance ◽  
Content Type ◽  
Subsidiary Management ◽  
The Impact

Purpose The purpose of this paper is to analyze the relevant aspects that influence foreign subsidiary’s performance and remain how they retain competitiveness in international markets during economic crisis. To investigate this effect, this research analyzes the behavior of Japanese subsidiaries located in European countries during the pre- and post-crisis periods that started in the USA in 2008 and spread all over the world. Design/methodology/approach This is a quantitative study with an analysis based on longitudinal data of foreign subsidiaries of Japanese multinational firms during the period 2006-2013. It applies a multiple linear regression with panel data using fixed effects models. Findings The findings show that within-firm factors related to local experiential knowledge, market entry through joint ventures with partners from the same nationality, and subsidiary management with a team of expatriates all have a positive impact on subsidiary performance during times of economic crisis. Moreover, within-country factors involving macroeconomic aspects related to inflation rate and population income indicators show a negative impact on performance. Finally, the results confirm that subsidiary performance is higher in the pre-crisis period, showing the importance of considering economic crisis aspects in longitudinal studies. Practical implications The result has implications for managers of multinational firms to understand which factors most impact the success of their foreign subsidiaries during times of economic crisis. In this way, managers can, with greater confidence, decide to reach the most important performance indicator in subsidiary management. Originality/value The majority of studies on economic crisis is based on an economic perspective and mostly investigates Asian and Argentinean crises. When considering a firm-level perspective, most research studies conducted on a subsidiary level are cross-sectional or use survival as a measure of performance. This paper applies a longitudinal study using subsidiary-level data and analyzes performance by sales and productivity measurement. In addition, it investigates whether or not within-country and within-firm factors impacted subsidiary performance during the 2008 economic crisis.

Sending expats or hiring locals The impact of communication barriers on foreign subsidiary CEO staffing

2020 ◽  
Vol 14 (5) ◽  
pp. 891
Author(s):  
Helene Tenzer ◽  
Matthias Schulz ◽  
Hendrik Klier ◽  
Christian Schwens
Keyword(s):  
Communication Barriers ◽  
Foreign Subsidiary ◽  
The Impact

Setting up in Silicon Glen: Inward Investment and Implications for Spin-off and Supplier Linkages

1992 ◽  
Vol 10 (4) ◽  
pp. 423-438 ◽  
Author(s):  
J McCalman
Keyword(s):  
Foreign Investment ◽  
Electronics Industry ◽  
Foreign Subsidiary ◽  
Current State ◽  
The Impact

In this paper the current state of development in the electronics industry and the impact that foreign investment has on peripheral economies are examined. With the Scottish electronics industry as an example, the likely impact on the growth of indigenous firms from Japanese and US investment is explored. The author argues in favour of a more direct policy role for government in assisting the establishment of growth in spin-off indigenous firms from the foreign subsidiary base currently present in the Scottish electronics industry.

Sending expats or hiring locals? The impact of communication barriers on foreign subsidiary CEO staffing

2019 ◽  
Vol 1 (1) ◽  
pp. 1
Author(s):  
Helene Tenzer ◽  
Hendrik Klier ◽  
Christian Schwens ◽  
Matthias Schulz
Keyword(s):  
Communication Barriers ◽  
Foreign Subsidiary ◽  
The Impact

Effects of two staffing decisions on the performance of MNC subsidiaries

2014 ◽  
Vol 2 (1) ◽  
pp. 85-101 ◽  
Author(s):  
Naoki Ando ◽  
Yongsun Paik
Keyword(s):  
Multinational Corporations ◽  
Foreign Subsidiary ◽  
Foreign Subsidiaries ◽  
Data Set ◽  
Subsidiary Performance ◽  
Content Type ◽  
Host Country Nationals ◽  
Negative Effect ◽  
Curvilinear Relationships ◽  
The Relationship

Purpose – The purpose of this paper is to examine the relationship between foreign subsidiary staffing and subsidiary performance by focussing on two staffing practices: first, the ratio of parent country nationals (PCNs) to foreign subsidiary employees and second, the number of PCNs assigned to the foreign subsidiary. Design/methodology/approach – Hypotheses predicting curvilinear relationships between the assignment of PCNs and subsidiary performance are tested using a panel data set consisting of 4,858 foreign subsidiaries of Japanese multinational corporations (MNCs). Findings – The results demonstrate that the two staffing practices have different effects on subsidiary performance. The ratio of PCNs to foreign subsidiary employees has an inverted U-shaped relationship with subsidiary performance, while the number of PCNs assigned to the subsidiary has a linear and negative effect on subsidiary performance. Research limitations/implications – The results of this study are subject to limitations. First, the sample used in this study consists solely of the foreign subsidiaries of Japanese firms. This research design limits the generalizability of the findings of this study. Second, other decisions related to subsidiary staffing such as the ratio of PCNs in the subsidiary's top management team need to be examined to advance understandings of the relationship between subsidiary staffing and subsidiary performance. Practical implications – MNCs need to identify the appropriate number of PCNs at which they can achieve the optimal trade-off with the PCN ratio to enhance the competitiveness and the performance of a foreign subsidiary. In doing so, they need to take into consideration that an increase in the number of PCNs has an immediate negative effect on the workplace morale of host country nationals. Originality/value – This study incorporates two staffing practices into its analyses and shows that they have different implications for subsidiary performance. The results suggest that focussing on one staffing practice alone limits understanding of the complex relationship between foreign subsidiary staffing and subsidiary performance.

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