An internalization perspective on subsidiaries’ reputation and its impact on subsidiaries’ marketing advantage: The moderating roles of resources and autonomy

Peter Buckley, Destan Kandemir, Steven Y.H. Liu and Esra F. Gençtürk

Journal of Business Research, 2024, vol. 175, issue C

Abstract: Internalization theory of Multinational Enterprises (MNEs) provides a paradigm in the international business field. Contemporary discussions consider MNEs as differentiated network with self-initiated subsidiaries. However, while moving away from pure hierarchy, internalization theory has not fully particularized the coordinating mechanism across MNEs’ networked subsidiaries. Accordingly, we propose a novel role of subsidiaries’ reputation within their MNEs. Based on primary data from subsidiaries’ perspective, our findings are threefold. First, we demonstrate that a subsidiary’s reputation within the MNE is a critical driver for subsidiary-specific advantages. Second, we examine how subsidiaries’ strategic actions can send signals to their headquarters and sister subsidiaries to build its reputation. Finally, along with the reputation-building process, we reveal the contingencies of subsidiaries’ autonomy and resources within the MNE. Our results show that internalization enables a differentiated network mechanism constituted by reputation, autonomy control, and resource allocation across MNEs’ networked subsidiaries.

Keywords: Internalization theory; Subsidiaries; MNEs; Reputation; Autonomy; Resource allocation (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:175:y:2024:i:c:s0148296324000699

DOI: 10.1016/j.jbusres.2024.114565

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