Determinants of international subsidiaries’ performances

Fang-Yi Lo and Ricky Tan

International Journal of Emerging Markets, 2019, vol. 15, issue 4, 746-766

Abstract: Purpose - One important strategy Multinational Enterprises (MNEs) employ to compete in the global market is to engage in foreign investment, but firms must know how they can perform better in the host country market. International subsidiaries’ performances play a chief role for MNEs’ globalization strategy. The purpose of this paper is to construct multi-level research with parent-level data at the higher level and subsidiary-level data at the lower level. Design/methodology/approach - This study helps capture the rapid growing trend in emerging markets and uses a sample of Taiwanese enterprises and their subsidiaries in China. The data come from theTaiwan Economic Journaldatabase. Precisely, the authors obtain 711 Taiwanese MNEs and 4,458 of their subsidiaries in China. Findings - This study finds among the parent company’s attributes that firm size, firm total performance, depth of internationalization and foreign shareholding have significant impacts on subsidiary performance, while within the subsidiary’s attributes, subsidiary size, subsidiary-owned capital and total investment fund significantly affect subsidiary performance. Originality/value - In order to capture subsidiary performance, this study uses a multi-level analysis approach with the Hierarchical Linear Model statistic method to separate parent company attributes and subsidiary-owned attributes as two distinct levels. This method fills the gap in the literature by analyzing subsidiary performance and clarifying that foreign direct investment is a multi-level phenomenon that cannot be analyzed using a one-level analysis method.

Keywords: Emerging markets; Multi-level analysis; Hierarchical Linear Model; International subsidiary performance; Parent company level; Subsidiary level (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

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:eme:ijoemp:ijoem-06-2019-0445

DOI: 10.1108/IJOEM-06-2019-0445

Access Statistics for this article

International Journal of Emerging Markets is currently edited by Prof Ilan Alon

More articles in International Journal of Emerging Markets from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().