Subsidiary Autonomy and Expatriate Retreat

Ralf Bebenroth

Chapter Chapter 2 in The Great East Japan Earthquake and Its Impact on German Firms, 2014, pp 21-32 from Springer

Abstract: Abstract This second chapter examines how two factors, subsidiary autonomy and the retreat of expatriates, influenced Japan-based foreign subsidiaries to either temporarily close their offices or relocate them out of the Tokyo (Kanto) area. It can be shown that subsidiaries with higher degrees of autonomy changed their status significantly more often. This means that the more autonomous the subsidiaries were, the more costly it was for the headquarters in the aftermath of the disaster. In contrast to the transaction cost theory, which argues that better performing subsidiaries have higher levels of autonomy, my findings indicate that a lower level of autonomy would be better to prevent unnecessary closings or relocations in the case of a crisis.

Keywords: Foreign Firm; German Firm; Reduce Transaction Cost; Transaction Cost Theory; Affiliate Firm (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:spbrcp:978-4-431-54451-7_2

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DOI: 10.1007/978-4-431-54451-7_2

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