Protectionism and its Impact on MNC Subsidiaries’ Performance

Pervez N. Ghauri (), Shufeng Simon Xiao (), Byung Il Park () and Seong-Jin Choi ()
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Pervez N. Ghauri: Birmingham Business School University of Birmingham
Shufeng Simon Xiao: Sookmyung Women’s University
Byung Il Park: Hankuk University of Foreign Studies College of Business
Seong-Jin Choi: Hanyang Business School, Hanyang University

Management International Review, 2023, vol. 63, issue 5, No 2, 757 pages

Abstract: Abstract This study investigates the relationship between local protectionism and performance of multinational corporation (MNC) subsidiaries in China. We integrate overarching theories (i.e., institutional theory and extended resource-based view) to investigate a model for identifying whether local protectionism at the subnational level is beneficial or detrimental for foreign subsidiary operations or functions as a double-edged sword. We also examine whether or not internal organizational capabilities and relational capital with government moderate the effects. On the basis of regression analyses, our empirical findings reveal that the positive or negative effects of subnational protectionism in China depend on performance types. Moreover, performance contribution is considerably moderated by various internal capabilities of MNC subsidiaries. Findings offer valuable and practical implications for MNCs intending to invest in emerging economies.

Keywords: Subnational protectionism; Performance; Technological capability; Marketing capability; Government–firm relationship (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s11575-023-00519-z

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