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Home-country government support, interstate relations and the subsidiary performance of emerging market multinational enterprises

Xia Han, Xiaohui Liu, Tianjiao Xia and Lan Gao

Journal of Business Research, 2018, vol. 93, issue C, 160-172

Abstract: Drawing on the institution-based view and the global political economy perspective, this study examines the role of home-country government support and interstate relations in the overseas subsidiary performance of Chinese multinational enterprises (MNEs). We focus on two aspects of home-country government support: financial support and non-financial policy support, as well as their effects under the contingency of interstate relations. Using survey data, we find that Chinese MNEs' subsidiary performance is positively related to the degree of home-country government non-financial policy support, but not financial support. The impact of non-financial policy support is contingent on interstate political and economic relations. Stronger interstate political relations complement the impact of non-financial policy support on subsidiary performance, whereas interstate economic relations have a substitutive effect.

Keywords: Emerging market MNEs; Subsidiary performance; Interstate relations; Global political economy; Institutional embeddedness; China (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:jbrese:v:93:y:2018:i:c:p:160-172