When Do Distance Effects Become Empirically Observable? An Investigation in the Context of Headquarters Value Creation for Subsidiaries

Sjoerd Beugelsdijk (), Phillip C. Nell and Björn Ambos

Journal of International Management, 2017, vol. 23, issue 3, 255-267

Abstract: Integrating distance research with the behavioral strategy literature on MNC headquarters-subsidiary relations, this paper explores how the distance between headquarters and subsidiaries relates to value added by the headquarters. We show for 124 manufacturing subsidiaries in Europe that, on average, distance is unrelated to value added by headquarters but that this effect is contingent upon the extent to which the subsidiary is locally embedded. Only after a certain threshold level of subsidiary embeddedness, distance is negatively related to headquarters value added. This effect is more pronounced for cultural, economic, and administrative distances than for pure geographic distance, highlighting the critical role of contextual variation for MNCs.

Keywords: Multinational corporations; Distance; Headquarters-subsidiary relationships; Headquarters value added; Subsidiary embeddedness; Behavioral approach (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1075425316302083
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:intman:v:23:y:2017:i:3:p:255-267

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/601266/bibliographic
http://www.elsevier. ... 601266/bibliographic

DOI: 10.1016/j.intman.2017.03.002

Access Statistics for this article

Journal of International Management is currently edited by M. Kotabe

More articles in Journal of International Management from Elsevier
Bibliographic data for series maintained by Catherine Liu ().