 Explaining the performance of divested overseas subsidiariesAlex Mohr, Palitha Konara and Panagiotis Ganotakis International Business Review, 2020, vol. 29, issue 1 Abstract: We examine the post-divestment performance of subsidiaries that have been divested by their foreign owners and have subsequently been acquired by domestic owners. Drawing on Hymer’s classic explanation of firm internationalization and on the resource-based view dimension of internalization theory, we suggest that the differences in terms of the degree to which FSAs are independent from the linkages to the parent firm will be reflected in the variation in the performance effect of a foreign-to-domestic sale of the business. We argue that the negative performance effect of a foreign-to-domestic sale of a subsidiary is lower (1) for older subsidiaries, (2) for subsidiaries oriented toward the domestic, and (3) when the foreign parent firm is located outside the subsidiary’s geographic region. By using propensity score matching and difference-in-differences estimations, we examine the proposed effects and provide novel insights on the performance implications of the foreign-to-local ownership changes. Keywords: Foreign divestment; Post-divestment performance; Internalization theory; Subsidiary-level FSAs; Foreign sell-offs; Subsidiary performance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:iburev:v:29:y:2020:i:1:s0969593119300617 Ordering information: This journal article can be ordered from DOI: 10.1016/j.ibusrev.2019.101602 Access Statistics for this article International Business Review is currently edited by P. Ghauri More articles in International Business Review from Elsevier |
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