Learning from Older Siblings: Impact On Subsidiary Performance

Garima Garg, Mayank Sewak and Anurag Sharma

International Business Review, 2022, vol. 31, issue 3

Abstract: Newer subsidiaries of a multinational enterprise (MNE) in a foreign (host) country will rarely possess the knowledge required for its performance. As such, a newer subsidiary will learn vicariously from the experiences of older subsidiaries of similar industries and the same MNE operating in the same host country. In particular, the newer subsidiary will learn two types of knowledge from older subsidiaries, namely, operational knowledge related to their experiences in the host country and their knowledge about local markets. Furthermore, we theorize that higher parent MNE ownership in newer subsidiaries will facilitate vicarious learning. We add that as newer subsidiaries gain experience, they become less dependent on vicarious learning from older subsidiaries. We find support for our hypotheses using a longitudinal sample of MNE subsidiaries in India. We conclude with implications for future research.

Keywords: MNE subsidiary performance; Experiential learning; Vicarious learning; MNE ownership; Emerging markets (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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DOI: 10.1016/j.ibusrev.2021.101957

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