Not all threats are equal: symbolic and realistic threats and the deployment of parent-country nationals

Fiona Kun Yao (), Jing Yu Yang (), Song Chang () and Jane Wenzhen Lu ()
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Fiona Kun Yao: University of Illinois at Urbana-Champaign
Jing Yu Yang: University of Sydney Business School
Song Chang: Hong Kong Baptist University
Jane Wenzhen Lu: City University of Hong Kong

Journal of International Business Studies, 2025, vol. 56, issue 2, No 5, 174-193

Abstract: Abstract Through extending the psychological approach to threats, we advance a threat–contingency model to understand how two domains of host-country threats–symbolic and realistic–drive multinational enterprises (MNEs) to deploy parent-country nationals to manage their foreign subsidiaries. When faced with symbolic threats related to ethics and morals in a host country, MNEs act rigidly and conservatively, increasing the likelihood of deploying parent-country nationals as executives in foreign subsidiaries. When dealing with realistic threats associated with potential economic losses in a host country, however, MNEs are adaptive, decreasing the tendency to transfer parent-country nationals abroad and increasing the use of host-country nationals in foreign subsidiaries. The two threats interact in affecting staffing decisions. Moreover, industry globalization moderates asymmetrically the influences of the two threats: globalization strengthens the effect of symbolic threats but weakens the effect of realistic threats. We used a primary archival study and supplementary laboratory studies to test our hypotheses. Overall, our study provides an additional theoretical account to explain MNEs’ divergent responses toward two domains of threats in a host country. We conclude the study with implications for international business and global mobility research.

Keywords: Multinational enterprises (MNEs); Symbolic threats; Realistic threats; Industry globalization; Global mobility (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1057/s41267-023-00654-7

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