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.

How do formal and informal institutional distance affect the reverse knowledge spillover of Chinese MNCs?

PurposeThis study examines the impact of outward foreign direct investment (OFDI) of Chinese multinational corporations (MNCs) and formal and informal institutional distances between the home and host countries on the innovation performance of parent company.Design/methodology/approachThis study uses panel data to conduct an empirical analysis on the data of 59 mature Chinese MNCs and their 872 overseas subsidiaries over the past 11 years and draws interesting results.FindingsResults show that OFDI and formal and informal institutional distances between countries exert a significant positive impact on the innovation performance of the parent company and formal and informal institutional distances negatively moderate the impact between OFDI and the parent company's innovation performance.Originality/valueAlthough international business research pays increasing attention to transnational differences in institutions and cultures, research on the relationship between technology spillover and distance is relatively limited. In addition, few studies consider the impact of FID and IFID on transnational reverse knowledge spillovers. This research fills these research gaps, and the conclusions have certain practical significance for multinational companies.

Post-merger integration and subsidiary roles in Chinese MNCs – the case of Chinese M&As in Germany

Purpose This paper adds to the literature on outward Foreign Direct Investments by Chinese Multinational Corporations (MNCs) in advanced economies. Its objective is threefold: to characterize the subsidiary roles that advanced economy targets of Chinese Multinational Corporations (CMNC) takeovers typically adopt, to assess the position that these subsidiary roles grant them within the CMNCs as a whole and to flesh out how subsidiary actors perceive and make sense of the particular constellation as a subsidiary of a CMNC. Furthermore, this paper aims to contribute to theory development on headquarters‐subsidiary relations by suggesting an additional theoretical lens. Design/methodology/approach The paper draws on in-depth qualitative case studies from the automotive, mechanical engineering and solar industries and focuses on German firms that have been acquired by Chinese MNCs. Theoretically, the present paper draws on extant post-merger integration (PMI) and subsidiary role research, particularly from a micro-political and sensemaking perspective, refined by adding a neo-imperial dominance – lens. Findings The paper reveals the subsidiary roles that German subsidiaries of Chinese MNCs typically adopt and discovers the PMI pattern of “reverse integration” delineating quite a particular form of reverse knowledge transfer. Regarding human integration, it emphasizes the importance of neo-imperial attitudes surfacing in the German subsidiaries. Originality/value The value of the paper is in contributing to fill the pending research gap on the subsidiary roles that advanced economy subsidiaries of Chinese MNCs adopt, on the resulting positions of these subsidiaries within the overall Chinese groups and the sense that subsidiary actors make of being acquired by a Chinese MNC. The paper also reveals the importance of neo-imperial dominance patterns and attitudes in PMI in the constellation scrutinized.

Relational embeddedness in home-based network and dynamic capabilities: evidence from Chinese MNCs

Purpose Prior studies have argued that multinational firms with dynamic capabilities can reconfigure and upgrade their internal and external resources and adapt to an ever-changing competitive global environment. The impact of home country networks exerting on multinational corporations’ (MNCs) dynamic capabilities has been rarely discussed in extant research. This paper aims to explore how two types of home country networks’ relational embeddedness (from domestic firms and foreign firms) affect Chinese MNCs’ dynamic capabilities. Design/methodology/approach Several hypotheses were tested by analyzing the survey data from 204 multinational companies in china. Findings The results reveal the impact mechanism of the home country network on dynamic capabilities. Embeddedness in domestic networks positively affects embeddedness in the foreign network; embeddedness in foreign firms exerts positive effects on the three dimensions of MNC’s dynamic capabilities. Additionally, the effect of domestic firms’ relational embeddedness on resource reconfiguring capability is mediated by foreign firms’ embeddedness. Consequently, this study provides a theoretical introduction for MNCs from emerging economies. Practical implications This study has several managerial implications for emerging MNCs’ international operations. For MNCs from emerging economies, close cooperation with domestic firms helps firms to develop a close relationship with foreign firms; meanwhile, developing a close relationship with foreign firms can obtain spillover about technology and management experience better, improving dynamic capability. Specifically, domestic embeddedness, through foreign embeddedness, can extend the impact to focal firms in developing resource reconfiguring capability. Originality/value This study provides an alternate view of how home country networks influence the dynamic capabilities of Chinese MNCs and outlines its impact mechanism. Therefore, the study contributes both to the international business literature and social network literature.