Regional location of multinational corporation subsidiaries and economic development contribution: Evidence from the UK

The regional location of multinational corporation (MNC) subsidiaries in their host country and their associated entrepreneurial output and networking activities are likely to affect their economic development contribution, measured in terms of technology and management know-how transfers; enhancement of innovativeness of other firms; and company spinoffs. This theme has considerable research and public policy value. We investigate the issue drawing from a large-scale study of 264 MNC subsidiaries based in the UK. The findings show that activities in developed regions are associated with higher economic development contribution than those in less developed regions. Moreover, entrepreneurial output and networking with partners external to the MNC system positively affect economic development contribution. Key implications of this study are that entrepreneurship critically influences economic development contribution, underlying the importance of the MNC subsidiary research stream; and that the policy practice of supply-side measures fostering entrepreneurial output and embeddedness in local networks seems to be appropriate to pursue.     

The overlooked distinction of multinational enterprise subsidiary learning: Its managerial and entrepreneurial learning modes

The theme concerning modes of learning in multinational subsidiaries is the focus of enquiry in the current study. This theme is closely linked to the issue of how subsidiaries become alert and seize opportunities. Such an investigation is also important for management practice because effective subsidiary learning can render sustainable competitive advantage in the host country. We performed an in-depth case examination on six multinational subsidiaries of a large Finnish firm. We identify two learning modes of multinational subsidiaries that we refer to as managerial and entrepreneurial learning. We find that managerial learning shares characteristics with the systems-structural learning perspective; is facilitated by embeddedness of the subsidiary in the MNE system; and, transferred in the MNE through many conventional and reverse knowledge flows. On the contrary, entrepreneurial learning shares characteristics with the interpretive learning perspective; is facilitated by embeddedness of the subsidiary in the host country; and, transferred in the MNE through relatively fewer reverse knowledge flows. The distinction between these two learning modes and their discrete characteristics enlighten past research that has largely failed to pinpoint the importance of the two modes for MNE subsidiary activities.     

The effects of subsidiary’s leadership and entrepreneurship on international marketing knowledge transfer and new product development

This study investigates the role of a strong subsidiary leadership and entrepreneurial culture in the promotion of marketing knowledge inflows. We further examine their consequences on the subsidiary’s ability to develop new products when moderated by the tacitness of knowledge. The data were collected from 202 Portuguese subsidiaries of multinational corporations and were analyzed using partial least squares structural equation modelling to test the hypotheses. The results indicate that subsidiaries’ strong leadership support and entrepreneurial culture are fundamental mechanisms that foster marketing knowledge inflows from both the headquarters and peer subsidiaries. Moreover, marketing knowledge inflows enhance the focal subsidiary’s innovation abilities. We also find that tacit knowledge exerts contradictory moderating effects on the transfers of marketing knowledge, carrying distinct implications for a subsidiary’s knowledge management. The results expand our understanding of the effectiveness of transferring marketing knowledge among multinational corporations’ (MNCs) subsidiaries.     

Knowledge development in MNC subsidiaries: The influence of MNC internal and external knowledge and control mechanisms

In this study, we examine the influence of control mechanisms and internal and external knowledge on multinational company (MNC) subsidiary knowledge development. Previous research stresses the importance of these factors for subsidiary behavior, but nonetheless they remain underexplored in the context of subsidiary knowledge development. The study is based on questionnaire data from 161 MNC subsidiaries in China and Finland. The results indicate that MNC internal and external knowledge, as well as decision‐making autonomy of MNC subsidiaries, positively influence knowledge development in MNC subsidiaries. Conversely, the importance of knowledge development as a performance evaluation criterion did not show any influence on MNC subsidiary knowledge development. © 2008 Wiley Periodicals, Inc.     

The drivers of evolution/upgrading in Mexico's maquiladoras: How important is subsidiary initiative?

Corporate entrepreneurship may play an important role as a driver of industrial upgrading in multinational subsidiaries. In this study, we test to determine if subsidiary initiative is related to industrial upgrading in a sample of 50 Mexican maquiladoras. Based on qualitative and quantitative data collected from plant managers, this study provides qualified support for the notion that increased responsibilities within MNC networks are something earned through the entrepreneurial efforts of subsidiary managers rather than given by the parent company.     

Social identity in MNCs based on language and nationality

The existence of multiple languages in a multinational corporation (MNC) causes tensions in the firm both by causing problems in communicating and by creating social groups. MNCs that adopt a common corporate language that is not their home language will find a problem of competing languages. Nationality is another cultural feature that leads to perceived biases that favor home‐country nationals. We explore both of these influences using social identity theory. Our research was conducted in a Spanish MNC that has subsidiaries in 42 countries and has adopted English as its corporate language. We used a mixed‐method approach with a mailed survey of 216 managers across 42 subsidiaries in the MNC and personal interviews of headquarters executives. We found that Spanish speakers enjoyed advantages in terms of access to resources for themselves and their subsidiaries, relative to non‐Spanish speakers. This access was greater when the Spanish speakers were Spanish nationals and was moderated by geographic proximity of the subsidiary to the headquarters and age of the subsidiary.     

The performance effects of vertical and horizontal subsidiary knowledge outflows in multinational corporations

Horizontal and vertical subsidiary knowledge outflows in multinational corporations (MNCs) are argued to be central to effective MNC performance. Building on the knowledge-based view of the firm, we develop a conceptual model to investigate the performance consequences, determinants and interaction effects due to coordination and control mechanisms, of horizontal and vertical MNC subsidiary knowledge outflows. The hypotheses are empirically tested with a dataset comprised of survey and archival data from over 200 MNC subsidiaries. Results indicate that explicitness and communication positively influence vertical and horizontal subsidiary knowledge outflows and that national cultural distance, centralization, formalization, and specialized resources moderate these influences. We also find that knowledge outflows to headquarters and to peer subsidiaries enhance an MNC's financial performance (i.e., return on assets). The results provide substantive evidence as to how vertical and horizontal knowledge operate within MNCs.     

How “space” and “place” influence subsidiary host country political embeddedness

As a part of multinational corporations (MNCs), subsidiaries operate in distinct host countries and have to deal with their external context. Host country political embeddedness, in particular, helps subsidiaries to obtain knowledge and understanding of the regulatory and political context, and to get access to local networks. Moreover, they get some guidance and support from their headquarters. Distance between MNC home and host countries, however, alienates subsidiaries from the MNC and influences the extent of subsidiary host country political embeddedness. We suggest that the host country political and regulatory context moderates the effect of distance on subsidiary host country political embeddedness by reducing the need and/or value of headquarters support. Using a sample of 124 European manufacturing subsidiaries, we find that distance (space) and context (place) matter jointly: the impact of distance is stronger for subsidiaries that operate in host countries with low governance quality and low political stability in place.     

Entrepreneurial leadership and MNE subsidiary performance: The moderating role of subsidiary context

Managers of international subsidiaries, especially subsidiary CEOs, operate at critical interfaces within multinational enterprises (MNEs) and hold strategic responsibility for the operations in their country. Yet, their impact on subsidiary performance has received scant research attention. Building on the subsidiary entrepreneurship and strategic leadership literatures, we develop a model of how subsidiary CEOs’ entrepreneurial leadership affects subsidiary performance, and how this relationship is moderated by the subsidiary context that determines managerial discretion. We combine survey data of 291 international subsidiaries in South Korea with archival data to test our hypotheses. Our results show that subsidiary CEOs’ entrepreneurial leadership enhances subsidiary performance and that this relationship is strengthened by managerial discretion. Our study highlights the pivotal role of subsidiary CEOs within MNEs and contributes to a microfoundational understanding of international subsidiary management.     

Subsidiary autonomy and performance in Japanese multinationals in Europe

Notwithstanding the growing body of research on headquarters–subsidiary relationships, the conditions under which subsidiary autonomy leads to enhanced subsidiary performance is still a subject of debate. This study adopts a contingency approach and investigates the effects of external uncertainties and intra-MNE coordination on the performance benefits of subsidiary autonomy. The empirical analysis is based upon cross-sectional data collected from 88 European subsidiaries of Japanese MNEs. Our findings show that subsidiary autonomy has a greater impact upon performance (a) under conditions of technological uncertainty; and (b) when expatriate involvement is high, as the subsidiary can reap the full benefits of entrepreneurial capabilities and enjoy resource interdependencies through interactions with the parent simultaneously. MNC executives should aim for an appropriate balance between subsidiary autonomy and these internal and external factors so that the subsidiaries achieve superior performance.     

Conflict and control in MNC new product introduction

One of the advantages of the multinational corporation (MNC) is that it can exploit new product ideas globally in a rapid manner. This raises the issue of control of MNC new product introductions. It has been demonstrated that control over MNC subsidiaries differs depending on the strategic role assigned to the subsidiary. But, in addition to its role in the MNC, a subsidiary also has a role in a business network of relationships with important customers, suppliers, and other business partners. There is a latent conflict between these two roles. This article formulates and analyzes a structural model in which the dependencies associated with the two roles are related to conflict and control in subsidiary new product introduction. The model is supported empirically and demonstrates that control is a matter of handling the latent conflict between the two roles.     

Organizing for knowledge flows within MNCs

This paper conceptualizes the multinational corporation (MNC) as a network of knowledge flows and argues that, within the same MNC, subsidiary strategic roles can be expected to differ in terms of the extent and directionality of knowledge flows between a focal subsidiary and the rest of the corporation. Building on this framework, the paper hypothesizes and empirically tests for systematic associations between a subsidiary's knowledge-flow based strategic role and the systems and processes linking the subsidiary to the rest of the corporation. The empirical data, collected from 359 subsidiaries of major US, Japanese, and European MNCs (i) provide strong support to the notion of differentiated knowledge flow roles as well as differentiated systems and processes within MNCs, and (ii) suggest that innovation by foreign subsidiaries is more typically the result of autonomous initiative by the subsidiaries rather than strategic directives issued from corporate headquarters.     

The effect of host country Internet infrastructure on foreign expansion of Korean MNCs

This study examines the effect of host country Internet infrastructure on a multinational corporation (MNC) foreign expansion. Using Heckman’s selection model on a sample of 2589 subsidiaries of 487 Korean MNCs between 1990 and 2011, we find that host country Internet infrastructure is important in MNC expansion decisions. In addition, we find that a well-developed Internet infrastructure within a host country leads to more investments from MNCs producing consumer over industrial goods and is more attractive to domestic market followers than market leaders. We find that the host country’s Internet infrastructure is important for an MNC foreign expansion decision, suggesting that efficient communication within an MNC is critical in coordinating globalized MNC subsidiary operations.     

Multinational subsidiaries and green innovation

We address the questions of whether multinational (MNC) subsidiaries are more likely to introduce green innovation (GI) than domestic firms and how intra-MNC resources are likely contribute to this effort. Using the Community Innovation Survey for 14 European countries and adopting a knowledge-based view of the MNC, our results suggest that subsidiaries have an advantage of foreignness in GI as respect to domestic firms, especially when they have an innovation mandate (i.e., competence-creating subsidiaries). Our findings also support that intra-MNC and extra-MNC cooperation for innovation increases subsidiary probability to introduce GIs, the two being substitutes.     

The impact of corporate and national cultures on decentralization in multinational corporations

We develop and test a model of multinational corporation (MNC) decentralization in which the allocation of decision rights to subsidiaries is explained by aspects of both internal corporate culture as well as external national cultures. We extend the literature on MNC decentralization by testing the impact of both of these factors as determinants within the same model. Drawing on management control theory as a conceptual platform, we argue that the assignment of decision rights to a subsidiary in the MNC is impacted by corporate innovativeness and shared values, as well by aspects of home and host country cultures. We test our model on a sample of 119 MNC subsidiary managers drawn from a diverse range of industries and locations. The findings provide support to the proposition that corporate innovativeness positively impacts the decision to decentralize, whilst also indicating that home country individualism and host country uncertainty avoidance have a significant influence. The findings challenge established international management logic with respect to shared values—this variable is found to have a negative relationship with decentralization. Overall cultural distance is not found to be significant.     

An empirical study of executive nationality staffing practices in foreign‐owned MNC subsidiaries in Ireland

This study provides empirical evidence of executive nationality staffing practices in foreign‐owned multinational company (MNC) subsidiaries in Ireland. Aiming to both describe current practice and understand the factors that influence the choice of practice, the study involved the collection of data from 238 foreign‐owned companies in Ireland. The findings negate previous findings (Harzing, 1999a, b) that all foreign‐owned MNC subsidiaries in Ireland are managed by Irish nationals. The employment of parent country nationals was found to differ according to country‐of‐origin, industry, subsidiary, and MNC factors. The study has relevance theoretically in providing empirical evidence in an area dominated by conceptual assertions and for practice in explaining the strategic staffing decisions of MNCs. © 2004 Wiley Periodicals, Inc.     

International entrepreneurial marketing strategies of MNCs: Bricolage as practiced by marketing managers

The extant research lacks information on entrepreneurial marketing in large international firms. This study explores the international entrepreneurial marketing strategies of multinational corporations (MNCs), and its results reveal that MNC marketing managers use bricolage to develop international entrepreneurial marketing. A novel finding of the study is that the international entrepreneurial marketing strategies of MNCs include co-innovation, accelerating customer value, and international expansion based on regional market leadership. Marketing managers use both parallel and selective bricolage in their international entrepreneurial marketing. Environmental uncertainty and entrepreneurship culture are important drivers of the implementation of bricolage to develop international entrepreneurial marketing. The research findings can inform MNC management of the options available to utilize corporate venturing to facilitate bricolage and in turn to realize international entrepreneurial marketing strategies.     

Knowledge creation capability in MNC subsidiaries: Examining the roles of global and local knowledge inflows and subsidiary knowledge stocks

Grounded in knowledge-based theories of the multinational corporation (MNC) and building on organizational learning literature, this paper develops and tests a model of MNC subsidiaries’ knowledge creation capability as a joint function of knowledge inflows to subsidiaries and their knowledge stocks (i.e., subsidiaries’ internal human, social, and organizational capital). Survey-based data from 106 subsidiaries located in the U.S. suggests that local (i.e., host country) knowledge inflows to a subsidiary are more effective in enhancing a subsidiary's knowledge creation capability compared to global knowledge inflows from other units of the same MNC. Furthermore, results point to a not-invented-here syndrome in the exploitation of knowledge sourced from the parent company; such that when a subsidiary's internal social capital is high, the relationship between global knowledge inflows and knowledge creation capability is negative and when it is low, the relationship becomes positive.     

跨国公司海外子公司研究综述及最新进展

文章按照分析的层级和对MNC概念化两个维度,回顾评析了跨国公司海外子公司研究所经历的4个阶段。回顾研究发现,随着跨国公司海外子公司的不断成熟,学者们越来越多地将研究焦点从关注跨国公司整体转移到其海外子公司层面,一些海外子公司在公司网络中的战略性作用不断增强。此外,对其所依据的主要基础理论进行了回顾分析发现,它们的演化和融合趋势日渐明显。在此基础上,总结了海外子公司研究的最新进展,即下属单位角色发展、下属单位创业和逆向护佑研究。     

跨国公司子公司研究的演进和未来的发展方向

本文通过对国内外有关跨国公司子公司研究的回顾,详细论述了跨国公司子公司研究的四大流派——战略—结构流派、母子公司关系流派、子公司角色流派和子公司发展流派的演进过程,分析了近几年跨国公司子公司的研究动态,总结了跨国公司子公司研究演进的变化规律,进而探讨了跨国公司子公司研究未来的发展方向。