Determinants of Staff Localization in Headquarters-Subsidiary-Subsidiary Relationships

This paper investigates how cultural distance, the local experience of a foreign subsidiary, and the intensity of local competition jointly affect the staff localization of MNEs’ subsidiaries. While previous studies on the effects of cultural distance have mainly focused on the gap between home and host countries, we extend the existing “home-host” country perspective to the home-intermediary-host country relationship. This study regards Korea as an intermediary country and utilizes 520 observations from a unique survey conducted by the Export-Import Bank of Korea from 2006 to 2013. The results suggest that the impact of cultural distance on staff localization is a function of local experience and competitive environment in the home-intermediate-host relationship structure. This paper makes a theoretical contribution to our understanding of the behavior of multinational corporations by expanding the cultural distance perspective between the home and host countries explored in previous research to the home-subsidiary-subsidiary structure.

Performance of Chinese foreign subsidiaries: the role of national distance, organizational learning and overseas Chinese networks

PurposeThe current literature lacks discussion on the effects of synergy among multiple factors at different levels on foreign subsidiary performance. The purpose of this paper is to explore the configuration of factors affecting foreign subsidiary performance.Design/methodology/approachThe methodology adopted in this paper is the fuzzy-set qualitative comparative analysis (fsQCA). The data are obtained from 125 foreign subsidiaries of Chinese MNCs through questionnaire surveys and secondary data.FindingsThe research results reveal that five configurations of antecedent conditions predict high foreign subsidiary performance, and the other two configurations predict not-high performance.Research limitations/implicationsThis paper’s main limitation is its only focus on foreign subsidiaries of Chinese MNCs, which means that the findings should be generalized with precaution. The most valuable implication is to identify the configurations that lead to high and not-high foreign subsidiary performance.Practical implicationsThis paper addresses the question of how interdependent factors at the national and corporate level are beneficial to foreign subsidiaries’ performance.Originality/valueThis study makes the following contributions to current theories: It provides (1) new insights for understanding the complex causality between antecedent conditions and foreign subsidiary performance and (2) a practical reference for the multinational operations of foreign subsidiaries.

Resource Relatedness and Its Effect on the Performance of Parent Firm and Foreign Subsidiary

The parent-subsidiary relation is attracting increasing academic interest. However, prior studies on the parent-subsidiary relatedness did not clearly demonstrate the effect of resource relatedness between the parent firm and its subsidiaries on the performance of parent and foreign subsidiaries. Building on resource-based and knowledge-based views, we investigated the effect of resource relatedness on the performance of parent firm and foreign subsidiary. We discussed the theoretical foundations and main accomplishments of prior studies. We developed a conceptual framework and hypothesis in order to close the existing research gap in the topic of interest. We claimed that resource relatedness has a positive impact on the performance of foreign subsidiary, while its effect on the performance of the parent firm can be both positive and negative.