MNCs’ HRM Strategy and Country of Origin Effect: Do North American, European and Japanese Firms Really Differ?

Gyu-Chang Yu (), Woo-Sung Park and Yung-Ho Cho
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Gyu-Chang Yu: Hanyang University, School of Business
Woo-Sung Park: Kyunghee University
Yung-Ho Cho: Ajou University

management revue. Socio-economic Studies, 2007, vol. 18, issue 4, 392-409

Abstract: Based upon the sample of 419 MNCs’ subsidiaries in Korea, we examined the country of origin effect in the choice of MNCs’ HRM strategy: transplantation, localization, and mixed. A multinominal logit regression analysis showed that there is an important country of origin effect in the choice between a localization strategy and a mixed strategy. North American MNCS tended to implement mixed strategy, while Japanese MNCs tended to adopt localization strategy. European MNCs were in the middle. The estimated log odds of choosing a localization strategy over a mixed strategy by Japanese subsidiaries were 1.79 times higher than European subsidiaries and 2.85 times higher than N. American subsidiaries; those by European subsidiaries were 1.59 times higher than N. American subsidiaries. However, the country of origin was not significantly related to the choice between a transplantation strategy and other strategies. We also examined two alternative factors influencing the HRM strategy of foreign subsidiaries: investment strategy and entry strategy. The implications of this and directions for future research are discussed.

Keywords: Country of Origin; HRM Strategy; Localization; MNCs; South Korea (search for similar items in EconPapers)
JEL-codes: F23 J53 M10 (search for similar items in EconPapers)
Date: 2007
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