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Subsidiary-specific advantages for inter-regional expansion: The role of intermediate units

Cristina Villar, Àngels Dasí and Ana Botella-Andreu

International Business Review, 2018, vol. 27, issue 2, 328-338

Abstract: This paper explores the distinctive deployment of resources and capabilities by subsidiaries in order to develop an intermediate role within the MNC. Based on the regional management perspective, we focus on a specific intermediate role—the springboard subsidiary—that helps overcome the liability of inter-regional foreignness. Our results, which are based on a dataset covering 188 subsidiaries, show that the probability of taking on this role is contingent upon experiential knowledge about the target region, as well as a rich knowledge base derived from a wide range of activities and a broad geographical scope. Our findings also show that possession of slack resources does not necessarily mean that a subsidiary will take on this role, as such slack must be combined with experiential knowledge. This paper serves as a first step in helping MNCs plan resource allocation to handle inter-regional expansion.

Keywords: Subsidiary-specific advantage; Liability of inter-regional foreignness; Intermediate unit; Springboard subsidiary; Regional strategy (search for similar items in EconPapers)
JEL-codes: M16 F23 (search for similar items in EconPapers)
Date: 2018
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