Investment motive as a moderator of cultural-distance and relative knowledge relationships with foreign subsidiary ownership structure

K. Skylar Powell and Eunah Lim

Journal of Business Research, 2017, vol. 70, issue C, 255-262

Abstract: In this analysis, we seek to contribute to the growing body of literature exploring moderators of cross-national differences and foreign subsidiary ownership structure relationships, by developing the argument that cultural distance and majority-owned foreign subsidiary relationships will be positively moderated if a subsidiary serves a manufacturing motive, as opposed to a market-seeking motive. Additionally, we argue that relationships between increasingly greater levels of host country technical knowledge, relative to a firm's home country, and the use of majority-owned foreign subsidiary structures will be negatively moderated by manufacturing motives. These ideas are tested, and supported, in the empirical context of subsidiaries of Japanese automotive firms from 1993 through 2009.

Keywords: Cultural distance; Knowledge differences; Foreign subsidiaries; Ownership structures; Automotive firms (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:70:y:2017:i:c:p:255-262

DOI: 10.1016/j.jbusres.2016.08.013

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