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This study investigates what attracts career‐oriented women to foreign subsidiaries and how they experience this work context. Based on 125 interviews with career‐oriented women in Japan, we find that their frequent choice of foreign employers is not only motivated by professional aspirations but also by identity‐related aspirations. Japanese women who embraced an internationalist orientation experience a confirmation of their identity by working for foreign subsidiaries; by contrast, those who still felt bound by traditional role expectations, undergo a liberating identity transformation. Based on the perceptions of these particular employees, we develop recommendations for gender diversity management in foreign subsidiaries. We further argue that women, who are disadvantaged in the local employment context, often desire that foreign subsidiaries implement standardized home country human resource management practices, instead of adopting local practices. By focusing on the recruitment of highly qualified women, foreign subsidiaries may turn their liability of foreignness into a competitive advantage. [ABSTRACT FROM AUTHOR]

This study uses matched firm‐bank‐FDI data from 1989 to 2016 to explore how a firm's financial constraints affect its foreign affiliate ownership structure choice. Importantly, it tests the hypothesis that parent firms with banks as their largest shareholders hold lower ownership shares in their foreign subsidiaries, in part due to typical bank risk‐averse behaviour. The empirical analysis confirms that foreign subsidiary ownership ratios are negatively associated with parent firms' debt ratios. Moreover, this study finds evidence that greater bank ownership of the investing parent leads to lower foreign affiliate ownership shares. However, this result is not robust to two specifications: 'crisis times' when bank lending is greatly restricted to all borrowers, and a follow‐the‐customer relationship where the bank already has an overseas subsidiary in the host country. [ABSTRACT FROM AUTHOR]

Despite of the increasing attention on Sustainable Development Goals (SDGs) implementation, emerging multinational corporations (EMNCs), and their foreign subsidiaries, as the promising contributors and main agents respectively to address SDG issues worldwide, have been rarely noticed in theoretical research. Drawing upon the loose coupling theory, this study seeks to address the unique challenges EMNCs facing in managing their foreign subsidiaries' SDG implementation, and informs on tackling the potential conflicts in meeting multiple SDG requirements of home and host countries. Based on a sample of 295 foreign subsidiaries from Chinese manufacturing firms, this study adopts polynomial quadratic regression with response surface analysis to examine the relationship between headquarter‐subsidiary (HQS) coupling structure and subsidiary sustainable development, as well as the role of parent corporate environmental responsibility (CER) and FDI motives in this process. Our findings demonstrate support for the positive effect of HQS coupling structure on subsidiary sustainable development, and the moderating role of FDI motives is confirmed. This study reveals the key mechanisms and contingencies of SDG implementation at the subsidiary level, and provides theoretical insights for EMNCs to tackle SDG issues globally, obtain legitimacy locally and deepen international expansion accordingly. [ABSTRACT FROM AUTHOR]

We investigate two cross‐border profit shifting channels used by foreign multinational enterprises (MNEs) in Australia and assess the effectiveness of the related measures adopted by the Australian Parliament to combat base erosion and profit shifting (BEPS). Overall, we find that Australian subsidiaries of foreign MNEs used tax‐induced intra‐group transfer pricing and, to a lesser extent, interest expense loading to shift profit out of Australia throughout the period from 2007 to 2020. However, we find no evidence indicating that profit shifting out of Australia via the two channels has reduced after the implementation of related BEPS countermeasures in Australia from 2013. [ABSTRACT FROM AUTHOR]

How much of lobbying activities disclosed under the Lobbying Disclosure Act (LDA) actually represent foreign clients? What are their interests? By identifying the global ultimate owners of all corporate clients filing with the LDA, I find that majority‐owned subsidiaries of foreign multinational corporations (MNCs) account for nearly 20% of corporate lobbying spending in 2015–2016. This amount is comparable to the entire foreign lobbying spending reported under the Foreign Agents Registration Act (FARA). Domestic subsidiaries of foreign MNCs are also found to lobby more frequently and spend more lobbying than American multinationals, after controlling for firm size, industry, and PAC contributions. These subsidiaries actively lobby on issue areas that clearly benefit their foreign parents. The findings suggest that foreign MNCs may actively influence U.S. policies through their domestic subsidiaries, and that the FARA captures only part of foreign lobbying in the United States. [ABSTRACT FROM AUTHOR]

In recent decades, multinational enterprises (MNEs) have increasingly harnessed local knowledge through various customer involvement practices implemented by their foreign subsidiaries. Our study, using a multi‐informant survey of 230 MNE subsidiaries in China, explores how these subsidiaries manage customer involvement in new product development (NPD). We specifically focus on two practices: using customers as an information source (CIS) or as a co‐developer (CIC). We posit that the two types of customer involvement have distinct effects on a subsidiary's innovation capability, which in turn impacts two critical NPD outcomes: innovativeness and speed to market. Moreover, we suggest that the roles that customers play in CIS and CIC, as well as their contribution to the subsidiary's innovation capability, depend on whether the specific knowledge is derived from the parent headquarters or local partners. Our findings reveal that technological knowledge transfer from the parent headquarters enhances CIS's effect on innovation capability, yet diminishes that of CIC. In contrast, knowledge sharing from local partners exerts the opposite effects. By elucidating the underlying mechanisms and contingencies, our study fosters a deeper understanding of customer involvement in NPD and provides insightful guidance for MNEs seeking to leverage local knowledge for successful innovations in foreign markets. [ABSTRACT FROM AUTHOR]

In recent decades, the largest European worker cooperatives, and those that are the most emblematic in their countries, have been transformed into multinational companies. This article examines workers'‐cooperative multinationality by providing a classifying tool based on the interaction between control rights and return rights held by foreign employees in the subsidiaries of multinational cooperatives. We illustrate our matrix of cooperative multinationality by classifying an internationalized historical cooperative, Up Group (formerly Chèque Déjeuner, SCOP). In the last few decades, the French cooperative Up has become a hybrid multinational player in the employee benefits industry by setting up capitalist subsidiaries both in France and overseas. The case study also reports on Up's innovative attempt to produce a global cooperative or a more democratic multinational enterprise through converting subsidiaries' employees into associates. [ABSTRACT FROM AUTHOR]

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This short paper investigates whether the US–China trade war has a different impact on domestic and multinational companies in China. Using the Orbis database with the coverage of ownership structure, we can identify Chinese multinational companies that own foreign subsidiaries with at least 51% stake. Then, using a panel dataset of Chinese companies from 2011 to 2019, we compare revenues of multinational and domestic companies before and after the trade war. We have found that multinational companies have about 8% higher in revenue after the trade war than domestic ones. These findings are consistent with the recent literature on the real hedging channel that operation flexibility reduces the impacts of tariff shocks. [ABSTRACT FROM AUTHOR]

High productivity of foreign direct investment (FDI) firms is a stylized fact. However, in the real world, there are subsidiaries owned by foreign parents but establishing their own foreign subsidiaries. Based on global ownership linkage data, we compare productivity levels of subsidiaries owned by parents in G‐7 countries but located worldwide. The FDI productivity premium is on average significantly small if investing firms are owned by foreign parents. Among firms with subsidiaries, the foreign ownership tends to reduce the FDI premium more when firms depend more on intangibles. This suggests that knowledge transfers within multinationals facilitate subsidiaries to make their own FDI. [ABSTRACT FROM AUTHOR]

This article examines the impact of the staffing of foreign subsidiaries of multinational enterprises (MNEs) on the innovation performance of the parent company and the moderating effect of the institutional distance between the host country and the home country. This paper conducts an empirical analysis on the data of 59 mature Chinese MNEs and their 872 overseas subsidiaries over the past 11 years and obtains some interesting results. The results show that the proportion of host country nationals (HCNs) in overseas subsidiaries has a significant positive impact on the innovation performance of the parent company and that it is not a simple linear relationship but rather an inverted U‐shaped relationship. As HCNs increase, the ability to acquire knowledge is increasing, while the ability to integrate knowledge is decreasing. Thus, multiplicative combinations of latent mechanisms result in an inverted U‐shaped relationship. However, the institutional distance between countries negatively moderates the effect of subsidiary HCN proportions on parent company innovation performance. The findings have important practical implications for the multinational innovation strategies of Chinese MNEs and governments. [ABSTRACT FROM AUTHOR]

The article aims to investigate the use of cross‐border mergers in worldwide constellations as a strategy for receiving tax‐optimized profit repatriation from foreign subsidiaries. The study is carried out on the basis of an exemplary case study of a cross‐border merger. Moreover, theoretical, analytical, and conceptual research methods used. The findings and implications are of general interest, since a cross‐border merger is in principle possible worldwide and not only in certain country constellations. Generally, the results of the study apply to any cross‐border merger, for example, also to a merger of any EU corporation into a foreign parent company irrespective of its residence. The results show that multinational firms can use cross‐border mergers as a stable strategy to obtain tax‐optimized profit repatriation from foreign subsidiaries and to optimize the group tax rate. This general strategy worked out in the article solves an essential and widespread problem for investments in foreign subsidiaries, namely how to repatriate the retained profits of foreign subsidiaries without triggering an excessive tax burden. A comparable strategy has not yet been found or developed in the literature. Consequently, there is no literature on the possibility of using cross‐border reorganizations as a strategy for a tax‐optimized repatriation of profits. [ABSTRACT FROM AUTHOR]

While organizations increasingly rely on headhunters, little research has focused on what kinds of employees are contacted by headhunters and how these contacts are related to turnover. This study uses an exploratory sequential mixed‐method design to examine what kinds of employees contingency headhunters contact and why some of them leave. Using the case of Japan, where foreign subsidiaries use headhunters extensively to recruit host country nationals (HCNs), we first conducted interviews with 131 clients, headhunters and HCNs (candidates). The findings indicated that the contacts made by headhunters were guided by the HCNs' age, gender, education level, English proficiency, tenure and prior placement by headhunters. The findings also showed that headhunter contacts drive up turnover, and that job alternatives and job embeddedness moderate the relationship between headhunter contacts and turnover. We used these findings and research on the unfolding model and headhunters to develop an abductively derived research model and hypotheses. In another study, we tested these hypotheses by time‐lagged survey data from 456 HCNs in foreign subsidiaries. The survey findings showed that headhunter contacts mediate the relationships between English proficiency, tenure and prior placement by headhunters, and that job alternatives and job embeddedness moderate the positive relationship between headhunter contacts and turnover. [ABSTRACT FROM AUTHOR]

We examine how institutional context affects the decisions that subsidiaries of multinational corporations (MNCs) make in pursuing particular human resource management (HRM) practices in response to institutional duality. Drawing on Varieties of Capitalism, along with the concept of intermediate conformity, we argue that the use of particular HRM practices by MNC subsidiaries will differ depending on both the combination of home and host institutional contexts, and on the nature of the particular practice under consideration. Using data from a survey of HRM practices in 1196 firms across 10 countries, we compare HRM practices in subsidiaries located and headquartered in different combinations of liberal and/or coordinated market economies. Our study suggests MNC subsidiaries conform only to the most persuasive norms, while exercising their agency to take advantage of the opportunities presented by institutional duality to adopt practices that distinguish them from indigenous competitors. [ABSTRACT FROM AUTHOR]

In drawing from transaction cost economics and social network theories, this study examines the influence of corruption as a determinant of foreign subsidiary formal contracting practices with government‐sponsored financial institutions. We hypothesize that lower corruption distance (between parent home and host countries) and higher perceived corruption (in host country) are positively related, and mutually reinforcing, when considering a foreign subsidiary's propensity to formally contract with government‐sponsored financial institutions. We also suggest that these relationships strengthen with the intensification of political ties to government officials who can offer preferential political services via contractual agreements, changing the nature of market transactions in favour of a foreign subsidiary. We found support for our hypotheses using data from a sample of over 350 subsidiaries located in the Philippines and Thailand. [ABSTRACT FROM AUTHOR]

Global staffing is a crucial factor for the success of the overseas operations of multinational corporations (MNCs). This study examines the contextual and organisational factors that affect the localisation of subsidiary staffing in the overseas operations of Japanese multinational companies. Using panel data containing more than 15 000 observations of Japanese overseas subsidiaries and a random‐effects logit model, we found that the cultural distance between the home country and the host country has a significant impact on the localisation of subsidiary staffing. In addition, the strategic importance of subsidiaries, as well as the local market orientation and business experiences in the host country, but not research and development (R&D) intensity of Japanese parent firms, have a significant impact on the localisation of foreign subsidiary staffing. We discuss the theoretical and practical implications of these findings. [ABSTRACT FROM AUTHOR]

Drawing on the institution‐based view of intellectual property (IP) rights, we argue that "distance" in IP protection strength of MNEs' home and host countries reduces the ability of MNEs to innovate at foreign subsidiary locations. We contend that this logic applies in both directions—i.e., (1) downward direction, when MNEs originating from stronger IP protection regimes innovate in weaker IP protection regimes, and (2) upward direction, when MNEs originating from weaker IP protection regimes innovate in stronger IP protection regimes. Furthermore, we suggest that the negative effect of IP protection distance on foreign subsidiary innovation performance will be moderated by internal (strategic) and external (institutional) conditions, such as the subsidiary experience, subsidiary ownership type (full vs. partial), cultural distance and the extent of scientific labor in the host country. We test the above relationships using a very large panel data set consisting of MNE subsidiary‐level data in the manufacturing industry for 15,246 subsidiaries of 11,284 parent firms, representing 47 home countries and 31 host countries and covering a total of 91,347 observations for the period 2005–2013. Our findings show that (1) the adverse effect of IP protection distance on subsidiary innovation performance applies in both directions; (2) the effect is more intense in case of the downward direction; and (3) the moderating effects vary depending on the direction of IP protection distance. [ABSTRACT FROM AUTHOR]

While labour geography notes that subsidiaries of multinational companies (MNCs) exploit workers, studies in vocational education show that the international subsidiaries perform education and training. Often, the latter strand of literature relates to cases of MNCs from countries with 'dual' apprenticeships that combine comprehensive vocational education and training (VET) of vocational schools/universities and companies. This is how VET is practiced in Germany, Austria and Switzerland. The VET literature also explores how transfer of 'dual' practices from these countries of origin can contribute to skilling employees in the host countries. Starting from these conceptual approaches, this paper takes a different perspective. It asks how training activities of MNCs with headquarters in countries where companies hardly combine their in‐house trainings with vocational schools, perform training activities in Germany where 'dual' apprenticeship is the prevalent institutional environment. Besides 'dual' VET, the study also includes MNCs' 'dually' coordinated training activities with universities. The topic of MNCs' training activities in such complex structured institutional environments has hardly been researched until now. Methodologically, the study is based on case studies and uses qualitative research approaches for the evaluation of interviews. The results illustrate a spectrum of different kinds of training by presenting three case studies and show how they relate to the particular institutional context in Germany. The discussion and conclusion integrate the results in further findings of the study and literature. [ABSTRACT FROM AUTHOR]

We study how trade liberalisation affects the extent of corporate decentralisation using the World Bank enterprise survey in China. In particular, we examine the autonomy of production, investment and employment decision and the incentive compensation of CEOs of subsidiary firms after China's entry in the World Trade Organization (WTO). We show that subsidiary firm CEOs receive more decision autonomy and higher powered incentives when facing increased foreign competition in output market. In contrast, subsidiary CEOs receive less decision autonomy and flat incentive compensation when foreign competition in subsidiaries' input market intensifies. When examining subsidiary CEOs' autonomy in different decisions, we find that CEOs' investment autonomy is more responsive to foreign competition than employment and production autonomy. We explain this difference through the agency cost angle by showing that firms whose CEOs with greater investment autonomy tend to spend more on managerial perks. Taken together, this paper sheds new light on how trade liberalisation reshapes firms' decentralisation decisions in a multi‐tasking principal‐agent setting. [ABSTRACT FROM AUTHOR]

Entrepreneurial initiatives by subsidiaries are greeted as well as contested. We examine the effect of institutional distance between the host country of a subsidiary and the home country of its parent multinational enterprise (MNE) on the resource support a subsidiary receives from the MNE for its entrepreneurial initiatives. Drawing on social exchange theory, and resource dependence theory, we argue that while informal institutional distance inhibits MNE resource support for initiatives, and formal institutional distance further exacerbates the subsidiaries' options, external embeddedness and reverse knowledge transfers may help subsidiaries bypass the negative effects of institutional distance and encourage MNE involvement in subsidiary initiatives. Using survey data from 429 foreign subsidiaries in New Zealand, and secondary data on formal institutional distance from the Worldwide Governance Indicators, the results from structural equation modeling provide support to our hypotheses. This study extends institutional distance, embeddedness, and subsidiary initiative research. Importantly, it contributes by demonstrating how contingencies such as dual embeddedness and (low) formal institutional distance can counterbalance the negative effects of informal institutional distance on subsidiary initiatives and MNE‐subsidiary initiative collaboration. [ABSTRACT FROM AUTHOR]

Drawing on theory and research on labour market intermediaries, we interviewed 51 contingency headhunters specialised in foreign subsidiaries in Japan to explore how they search host country national candidates and what factors influence their search activities. The findings suggest that headhunters search candidates through cold calls, personal and shared databases, online job boards and social network sites, and referrals. The findings also suggest that how headhunters search candidates are congruent with the perceived importance of client organisations, search firm size and headhunters' experience. The findings contribute to human resource management research by providing evidence of a complex cost‐benefit and experience‐related candidate search activities. [ABSTRACT FROM AUTHOR]

Over the period of time, patent filing in India has gone up significantly. However, no enough evidence is found in the literature about the quality or value of patented invention in the Indian context. To assess this question, we examine the patent renewal length (survival of patent) as a proxy of patent value for five different technology classes. This study uses the renewal information of firm‐level patents applied during January 1, 1995, and December 31, 2005, which were eventually granted. The data provided by Indian Patent Office consists of 2,025 resident patents assigned to 266 firms (foreign subsidiary firms and domestic firms). The survival analysis is carried out via Kaplan–Meier estimation and Cox proportional hazard regression. The outcomes of this study suggest that the survival length of patents significantly depends on their technological scope and inventor size. Moreover, the patents of the firms taking tax credit benefits exhibit lower survival rates as compared with patents of remaining firms. The study also finds that the patents filed by foreign firms with Department of Scientific and Industrial Research affiliation survive longer. Among different technological categories, electrical and mechanical patents are found to be more valuable compared with instrument patents. [ABSTRACT FROM AUTHOR]

The increase in economic globalization has created a need for multinational corporations to use expatriates to manage their foreign subsidiaries. Expatriate employees face many challenges that they can meet successfully only if they are well prepared through sound cross‐cultural training. In this exploratory study, we investigated the effects of cross‐cultural training on Chinese expatriates in Nigeria. We mainly focused on the relationship between predeparture and postarrival cross‐cultural training. In this study, we surveyed 198 Chinese expatriates in Nigeria and found that both predeparture and postarrival training have significant and positive influences on Chinese expatriates' adjustment. Additionally, our results demonstrated that language training and previous overseas experience also have positive effects on Chinese expatriates' adjustment in Nigeria. The implications of these findings are also discussed. [ABSTRACT FROM AUTHOR]

We empirically investigate the claim that multinational corporations (MNCs) suffer from a "home bias" in divestment decisions: MNCs prefer to divest from foreign subsidiaries because the "emotional involvement" and the commitment in divesting from domestic subsidiaries is larger. This issue has not been yet empirically explored in the economic literature, although it is quite recurrent in the political debate on MNCs and FDI. Using detailed company‐level data on the EU corporate groups during the economic crisis (2008–2014), we show that, in spite of prima facie empirical evidence of a home bias, the bias disappears when firm‐, country‐, and sector‐specific factors are accounted for. [ABSTRACT FROM AUTHOR]

Africa‐focused global value chain (GVC) scholars argue that the new mining industry practice of corporate outsourcing invalidates the traditional enclave thesis by providing new opportunities to support domestic firms and stimulate industrialization. However, this literature has clustered around Africa's middle‐ and high‐income countries and its analytical approach abandons the centre–periphery framework within which its earlier antecedents were grounded, while overlooking labour dynamics. Correcting for these limitations, this article explores the GVC literature's claims through a single case study of a gold mine in the Democratic Republic of Congo, representative of a process of foreign‐controlled gold sector (re)industrialization underway across a group of 20 low‐income African countries. The findings confirm rather than invalidate the original enclave thesis, observing that corporate outsourcing has done little to stimulate broader industrialization while facilitating the arrival and expansion of foreign firm subsidiaries. Meanwhile, the new industry practice has also facilitated the adverse incorporation and fragmentation of Congolese labour, thus weakening the collective strength of workers. The findings demonstrate the value of expanding the conventional GVC framework to incorporate a consideration of peripherality and the capitalist labour process, and demonstrate the need for state intervention via pro‐labour and industrial policy. [ABSTRACT FROM AUTHOR]

Acknowledging the sharp growth of Chinese state‐affiliated multinationals and their strategic asset‐seeking investments abroad, this study investigates the effects of headquarters' home‐country political ties on the multinational‐wide benefits gained from subsidiary knowledge transfer in Chinese multinationals. It also looks at how these effects are mediated by organizational distance and social integration between headquarters and subsidiary. Based on a survey of 177 subsidiaries of 99 Chinese multinationals, we find that headquarters' political ties trigger organizational distance and hinder social integration between headquarters and foreign subsidiaries and these, in turn, hamper the potential benefits that Chinese multinationals derive from subsidiary knowledge transfer. This study identifies new challenges related to political ties and light‐touch integration in gaining benefits from subsidiary knowledge transfer. [ABSTRACT FROM AUTHOR]

We consider the role played by the European Union's Emissions Trading System (EU ETS) as a possible driver of outward foreign direct investment (FDI) for Italian manufacturing firms. Using a panel dataset of about 22,000 firms covering the first two phases of the EU ETS and the period before the EU ETS, we measure the patterns of FDI towards countries not covered by the EU ETS. The results show that the EU ETS had a weak effect on the number of new subsidiaries abroad (extensive margin), while it had a larger impact on production taking place in foreign subsidiaries (intensive margin), especially in trade‐intensive sectors. [ABSTRACT FROM AUTHOR]

We study the relative survival of foreign- and domestically owned companies in Denmark over more than a century (1895–2005). Contrary to previous studies that have emphasized the liability of foreignness, we find evidence of a significant survival premium for foreign-owned companies; however, the premium declines over time and disappears entirely in the last decade leading up to 2005. Further evidence indicates that the foreign survival premium is negatively influenced by new foreign entry, and that the long-run decline is caused by increasing competition between foreign subsidiaries. Copyright © 2008 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

This article contributes to two recurring and very central debates in the international management literature: the convergence vs. divergence debate and the standardization vs. localization debate. Using a large-scale sample of multinationals headquartered in the United States, Japan, and Germany, as well as subsidiaries of multinationals from these three countries in the two other respective countries, we test the extent to which HRM practices in subsidiaries are characterized by country-of-origin, localization, and dominance effects. Our results show that overall the dominance effect is most important (i.e., subsidiary practices appear to converge to the dominant U.S. practices). Hence, our results lead to the rather surprising conclusion for what might be considered to be the most localized of functions-HRM-that convergence to a worldwide best practices model is clearly present. The lack of country-of-origin effects for Japanese and German multinationals leads us to a conclusion that is of significant theoretical as well as practical relevance. Multinationals might limit the export of country-of-origin practices to their core competences and converge to best practices in other areas. © 2007 Wiley Periodicals, Inc. [ABSTRACT FROM AUTHOR]

This paper studies the influence of external knowledge on innovation in subsidiaries of multinational firms. The focus on subsidiaries is especially interesting since they are simultaneously embedded in two knowledge contexts: (a) the internal multinational corporation (MNC) comprised of the headquarters and other subsidiaries; and (h) an external environment of regional or host country firms. We develop hypotheses to suggest that the extent of influences of these contexts on subsidiary technological innovation depends on the characteristics of the knowledge network (technological richness and diversity) and the knowledge linkages of the subsidiary with other entities. The study uses patent citation data pertaining to innovations by foreign subsidiaries of U.S. semiconductor firms to test these hypotheses. The paper finds that (a) the technological richness of the MNC, (b) the subsidiary's knowledge linkages to host country firms, and (c) the technological diversity within the host country have a positive impact on innovation. [ABSTRACT FROM AUTHOR]

Research on R&D location choice by MNCs has focused largely on host country factor endowments and overlooked the role that the potential to capture and utilize knowledge spillovers from competitors may also play in determining such choices. Using a large-scale panel database of the foreign subsidiaries of U.S.-based MNCs in above-average R&D-intensive industries, we examine the extent to which external spillover opportunities as well as internal firm-specific capabilities to utilize such knowledge affect MNCs' new R&D location decisions. Our findings suggest that MNCs appear to anticipate potential spillover opportunities and are discriminating in assessing these opportunities not only across locations but also across categories of competitors within the same location. Further, our findings provide stronger support to predictions regarding the salience of global utilization capacity. [ABSTRACT FROM AUTHOR]

This note extends transaction cost analysis of international joint ventures (IJVs) to include explicitly the effect of equity. It challenges the common practice of treating all foreign investments with between 5 percent and 95 percent equity as IJVs. A fine-grained analysis of the role of foreign equity ownership on the survival of 12,984 overseas subsidiaries confirms a declining, nonlinear, and asymmetrical relationship between equity and mortality in overseas subsidiaries. While investments involving small ownership levels (<20%) have very high mortality rates, those with high ownership levels (>80%) have mortality rates comparable to that of wholly owned subsidiaries. Implications for research, practice, and policy are discussed. [ABSTRACT FROM AUTHOR]

This paper seeks to understand the conditions under which 'centers of excellence' emerge in foreign subsidiaries of multinational firms. We define a center of excellence as an organizational unit that embodies a set of capabilities that has been explicitly recognized by the firm as an important source of value creation, with the intention that these capabilities be leveraged by and/or disseminated to other parts of the firm. Drawing on overlapping research in international business and strategic management, we argue that the formation of centers of excellence is shaped by conditions in the subsidiary's local environment as well as by various aspects of the subsidiary's relationship with other parts of the multinational firm. Based on a survey of 99 foreign units in Canada, our results highlight the fundamental role played by parent firm investment as well as the role of internal and external organizations in the development of subsidiary capabilities. Performance implications of the center of excellence phenomenon are also explored. [ABSTRACT FROM AUTHOR]

Most foreign direct investment (FDI) theories assume that foreign subsidiaries are at a disadvantage relative to domestic firms; that is, they suffer a liability of foreignness. Following this reasoning, most FDI research has focused on advantages foreign investors must possess to overcome whatever disadvantages they face. Research directly investigating the sources of foreign subsidiary disadvantages has been notably lacking, despite the fact that understanding disadvantages could uncover ways to reduce exposure to these liabilities of foreignness and improve management of FDL This study focuses on whether labor lawsuit judgments represent a liability for foreign subsidiaries operating in the United States (U. S.). Specifically, I tested whether 486 British, German, and Japanese subsidiaries operating in the U.S. had more labor lawsuits brought to judgment than a matched sample of U.S.-owned firms. Results indicate that foreign subsidiaries faced significantly more labor lawsuit judgments in both federal and state jurisdictions. I also investigated several variables hypothesized to be associated with a reduction in labor lawsuit judgments facing foreign subsidiaries. Foreign subsidiaries who used American top officers or whose parent firms had more U.S. operations faced fewer lawsuits, while foreign subsidiaries using human resource professionals actually faced more labor lawsuit judgments. Implications of these findings and avenues for future research are discussed. [ABSTRACT FROM AUTHOR]

In the international human resources management literature, the discussion of staffing policies takes a prominent place. The most important element in an international context is usually the executive nationality policy in foreign subsidiaries. Unfortunately, although many publications focus on the advantages and disadvantages of employing Parent Country Nationals as opposed to Host Country Nationals and some give an overview of the factors that might influence executive staffing policies' there are surprisingly few studies that examine actual multinational corporations (MNC) staffing practices. A large-scale, international study that systematically investigates a number of factors that might influence executive staffing practices in foreign subsidiaries seems long overdue. As indicated above, previous studies were mostly conceptual. If they did contain any empirical work, it was based on a relatively small sample and/or investigated a very limited number of home and host countries. In addition, few authors offered a theoretical framework for their investigation. Unfortunately, large-scale international studies almost inevitably involve mail surveys which are plagued by low response rates.

This paper discusses the internal patterns of competence building in the multinational enterprise (MNE), with a focus on the creation of capabilities in its foreign subsidiaries. We present a new framework to synthesize 10 types of MNE-subsidiary linkages leading to capability development. We find that several of the 10 capability development processes are associated with subsidiary-specific advantages. We discuss the process of subsidiary-specific advantage development within the organizational structure of the MNE when it is a differentiated network of dispersed operations. [ABSTRACT FROM AUTHOR]

This study explores the environment-strategy-performance relation of foreign firms, especially those with a market-seeking mandate, in China. The results indicate that the Analyzer orientation is best suited to the turbulent Chinese market, which has been undergoing an economic transition in recent years. There is also a significant difference in financial performance among market-seeking MNCs depending on strategic orientations, with the Analyzer orientation producing the highest performance. The Prospector and the Defender orientations lead to poor financial performance because of the mismatch with China's market, which is highly dynamic and complex. Our findings reiterate the importance of understanding local market traits and opportunities and developing proper strategic configurations for market-seeking MNC subsidiaries, especially in an emerging economy like China. [ABSTRACT FROM AUTHOR]

This study contributes to the literature on the nature and evolution of the multinational enterprise by exploring the geographic origins of the knowledge sources utilized by foreign subsidiaries during the process of technological innovation. Through a synthesis of the multi- national literature and the broader literature on external sources of innovation, I develop and test a set of hypotheses that explain the conditions under which innovating subsidiaries are likely to draw upon sources of knowledge located in the home base of the firm and/or the subsidiary's host country environment. The hypotheses are tested through an analysis of the citations listed on over 10,000 patents issued to U.S. greenfield subsidiaries between 1980 and 1990. [ABSTRACT FROM AUTHOR]

An overlooked aspect of agglomeration economies, which are positive externalities that stem from the geographic clustering of industry, is that firms contribute to the externality in addition to benefiting from the externality. This insight suggests that if firms are heterogeneous, they will differ in the net benefits they receive from agglomerating. We argue that firms with the best technologies, human capital, training programs, suppliers, or distributors will gain little, yet competitively suffer when their technologies, employees, and access to supporting industries spill over to competitors. Therefore, these firms have little motivation to geographically cluster despite the existence of agglomeration economies. Conversely, firms with the weakest technologies, human capital, training programs, suppliers, or distributors have little to lose and a lot to gain; therefore, these firms are motivated to geographically cluster. As a result, when firms are heterogeneous we expect agglomeration to be characterized by adverse selection. We find supportive evidence of these arguments by examining the location choice and survival of foreign greenfield investments in U.S. manufacturing industries. [ABSTRACT FROM AUTHOR]

In this study, we combine social exchange and knowledge-based perspectives to develop a general path model of IJV survival. We further refine our expectations by considering the transitional economic context of our study and the somewhat unique managerial values resulting from the legacy of Marxist ideology. Results from structural equation modeling suggest that an imbalance in the management control structure between the parents leads to parental conflict and an increased likelihood of IJV failure. An imbalance in the ownership control structure, however, had no influence on conflict or survival. In general, support from the foreign parent is positively related to IJV learning and IJV survival. However, higher levels of technical support provided by the foreign parent to the IJV reduced the level of parental conflict, whereas management support had no effect on conflict. Our results suggest some dilemmas for firms pursuing IJVs in transitional economies. Although the foreign parent often contributes critical resources to the IJV, providing it with bargaining power and a high level of influence, an imbalance in management control between the partners may ultimately be detrimental to IJV survival. [ABSTRACT FROM AUTHOR]

In this study, two different theoretical perspectives are used to develop sets of hypotheses regarding the mechanisms used to manage foreign subsidiaries of multinational corporations. First, agency theory serves as the basis for a model that predicts the use of monitoring mechanisms and incentive compensation. Then, it is argued that these mechanisms are insufficient for managing subsidiaries characterized by high levels of intra-firm international interdependence, the management of which is critical to many of today's complex global firms. A second set of hypotheses is argued, linking international interdependence to several social control mechanisms. Primary and secondary data from U.S. based multinational corporations were used to test both sets of hypotheses. The results indicate that agency theory, although a useful foundation for studies of control within MNCs, is limited in its ability to explain fully the phenomenon of foreign subsidiary control, however, the model based on intra-firm interdependence had much greater predictive ability. [ABSTRACT FROM AUTHOR]

While Intarakumnerd and Jutarosaga presents the current state-of-affairs in terms of UILs in Thailand, it would be helpful to deepen the discussion relating to the following points. Keywords: O32; O38 EN O32 O38 285 286 2 07/06/23 20230701 NES 230701 Many developing countries including those in East Asian region have been interested in the way to stimulate university industry linkages (UILs) in order to resume their economic growth and to improve their innovation capabilities, which are seen as a key to escaping from the middle income trap (Yusuf & Nabeshima, [4]). According to Intarakumnerd and Jutarosaga, there does not seem much difference among the local and foreign subsidiary firms in their propensity to engage in innovation activities (about 45% of local and foreign subsidiary firms). [Extracted from the article]

This paper examines the association between the stock returns and accounting earnings of firms that have different levels of operational flexibility. Operational flexibility is a firm's ability to respond profitably to environmental fluctuations by shifting factors of production within a multinational network of subsidiaries. The geographic breadth and depth of a firm's multinational network are used as indicators of operational flexibility. We find a significantly greater coefficient relating stock returns and accounting earnings for multinational firms that operate in many countries, but limit their concentration in any one foreign country, than for other multinational firms or domestic firms. This coefficient is significantly smaller for multinational firms whose foreign subsidiaries are highly concentrated in a few countries. When all multinational firms are pooled together, we find their earnings-returns association does not differ from that of domestic firms. [ABSTRACT FROM AUTHOR]

This study investigates the impact of entry timing, mode of entry, market focus, and location advantages on the financial performance and survival of multinational corporations (MJVGs) in China. Three major results were found. First, MNC's that entered China in an earlier year had a higher level of profit than those that entered in a later year. Second equity joint ventures (EJVs) had a higher profit level than cooperative operations or wholly foreign-owned subsidiaries. Third MNCs that utilized well the location advantages in China had a higher profit. We also found that EJVs were more likely to survive compared to cooperative operations, while wholly owned subsidiaries did not differ from EJVs. The findings are based on a 2-year study of about 1000 MNC operations in China. [ABSTRACT FROM AUTHOR]

This paper uses an embeddedness framework to reconceptualize HRM agency over the external labour market, and in so doing bring into focus the societal implications of HRM. Drawing on qualitative data from 53 key informants in two English regions, we identify the ways in which the subsidiaries of foreign multinationals (MNCs) engage with labour market skills actors. Our findings reveal how power structures are mobilized by local economic actors to align labour market skills with MNCs' demand priorities. We show that multinationals may seek to partially endogenize (i.e. take ownership of) the resources of local labour markets when their competitive value is redefined in social as well as economic terms, and demonstrate that the social structure of sub‐national institutional governance arrangements and firm strategic action on skills creates the conduit through which resource endogenization may occur. Theoretically, this paper identifies the social structure of networks as a casual mechanism to bridge divergent skill interests, which is mobilized when network actors have the capacity to frame fields within the social structure of the network around ideas on economic sustainability and moral interest. [ABSTRACT FROM AUTHOR]

This article presents the results of a survey comparing international human resource policies and practices in Japanese, European, and United States multinational companies. The survey focused on the use of expatriates over local nationals in overseas management positions, adoption of nonethnocentric policies, and incidence of international human resource management problems. Regression analysis using the entire sample indicated that ethnocentric staffing and policies are associated with higher incidence of international human resource management problems. Also, Japanese companies as a group are shown to have more ethnocentric staffing practices and policies, and they experience more international human resource management problems than do American and European firms. [ABSTRACT FROM AUTHOR]

Recent graduates in the field of international business face not only the entry shock of making the transition from school to work, but also the culture shock of working in foreign countries or with joint ventures and foreign subsidiaries. Using survey data collected from 459 recent recipients of masters degrees in international business, this article explores the special problems new entrants into the field of international business face in their first few jobs and suggests organizational strategies for more effectively socializing these new global managers. INSETS: Table II: Difficulties Encountered in Entry Shock & Culture...;Table III: Recommendations for Socializing New Global.... [ABSTRACT FROM AUTHOR]

The significant reduction in the use of home country expatriates abroad by American multinationals is generally taken positively, reflecting internationalization, the environmental competence of host country nationals, equity, and the cost of maintaining Americans abroad. In this article I dissent, arguing that the phase-out of expatriates has gone too far, much further in fact than Europe an or Japanese competition and that the dominant reason for the cutback is the difficulty Americans have in adapting to overseas assignments and the high failure rate they have experienced. I conclude that expatriate reduction has significant consequences for the strategic management of multinational corporations: reduced identification with the worldwide organization and its objectives, difficulty exercising control through personnel, and a lack of opportunities for Americans to gain international expertise through assignments abroad. Although I do not advocate returning to the ineffective and inequitable over-reliance on home country nationals, I argue that a corps of expatriates performs a function valuable to the MNC and that a means must be found to develop a group of managers who identify with the organization as a whole and provide overseas experience to home country managers. [ABSTRACT FROM AUTHOR]

In order to delineate the current state of the art of overseas relocation programs in U.S. multinational corporations, the extant literature was reviewed in the areas of expatriate personnel selection, training and career-pathing. The implications of the study's findings for U.S. MNCs are discussed and recommendations for policy change are offered. [ABSTRACT FROM AUTHOR]

Laurent perceives the challenge faced by the infant field of international human resource management as solving a multi-dimensional puzzle located at the crossroad of national and organizational cultures. His research findings conclude that deep-seated managerial assumptions are strongly shaped by national cultures and appear quite insensitive to the more transient culture of organizations. How many headquarters genuinely believe they can learn from their foreign subsidiaries? How many implement such a rare belief by internationalizing headquarters staff and top management? He advocates the development of forward-looking international corporate cultures that could provide the impetus and proper framing to address the key issues in international HRM, thereby integrating strategic choices in a global vision of the firm. [ABSTRACT FROM AUTHOR]