Host-Country Determinants of the Market Strategies of US Companies' Overseas Subsidiaries

Marina Papanastassiou and Robet Pearce

International Journal of the Economics of Business, 1994, vol. 1, issue 2, 199-216

Abstract: As compeition in many industries becomes increasingly global, MNEs have found that import-substitution subsidiaries, focusing on the supply of national markets, are much less viable. In the pursuit of enhanced competitiveness through export-oriented subsidiaries, MNEs are also finding that relying on low-cost host-country inputs to produce established productss is also a limited strategy. The more dynamic strategy of allowing subsidiaries to use a wider range of creative local inputs to take full responsibility for the development, production and international marketing of distinctive new products is a more effective approach. Such an upgrading of the subsidiaries' role within the MNE often parallels the aims of host-country governments to achieve a more individual and dynamic basis for their country's evolving comparative advantage. It is thus argued that MNE subsidiaries and host countries can go through a mutually supportive period of creative transition, endowing both with a new level of technological dynamism and independence. The paper tests aspects of these arguments by analysing the host-country determinants of the degree of export-orientation of US MNEs' overseas subsidiaries.

Keywords: Multinational enterprises; Market-orientation strategies; Creative transition, JEL classification F23,O33, (search for similar items in EconPapers)
Date: 1994
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Citations: View citations in EconPapers (10)

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DOI: 10.1080/758516795

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