Intra-firm Subsidiary Grouping and MNC Subsidiary Performance in China

Junqian Xu, Dan Huang and Yigang Pan

Journal of International Management, 2019, vol. 25, issue 2, -

Abstract: Many multinational corporations (MNCs) operate multiple subsidiaries in a foreign country. Drawing upon literature of organizational network and business group, we hypothesize that the number of subsidiaries of an MNC has an impact on subsidiary financial performance in China. We further hypothesized two moderating effects, namely subsidiary's country of origin and subsidiary size. The results show that subsidiary grouping effect is more salient for subsidiaries from Japan and South Korea, and that larger subsidiaries are less affected by the subsidiary grouping effect. Our empirical results were based on a sample of 40,315 MNC subsidiaries in China. The findings underscore the importance of group-based competitive advantages of MNC subsidiaries in international business.

Keywords: Subsidiary group; Location; Performance; China (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intman:v:25:y:2019:i:2:7

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DOI: 10.1016/j.intman.2018.10.001

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