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Using random H-1B visa lotteries as a natural experiment, we find that firms respond to shortages of high-skilled workers by acquiring firms that employ such workers. The effect is stronger among firms with high human capital and more senior workforces, firms facing tight labor markets and legal barriers to poaching workers, and firms lacking foreign affiliates. The acquired workers are highly educated, sharing skills and occupations similar to those of the acquirer's existing workers. Our findings suggest skilled labor is an important driver of acquisitions and acquiring is an effective means of obtaining skilled labor. [ABSTRACT FROM AUTHOR]

Purpose: Research on the political connections of multinational enterprises' (MNEs') subsidiaries in emerging host countries has been growing. The purpose of this paper is to integrate institutional and resource dependence theories to argue that MNEs-subsidiaries are likely to develop fewer formal (i.e. board-level) political connections when operating in welfare-state monarchies as compared to in host countries with developmental-state democratic systems. Furthermore, this paper argues that MNE-subsidiaries develop formal political connections to a greater extent in industries where religion influences the development of products and services considerably. Finally, the extent of developing formal political connections varies by the scale of the MNEs' investment (or subsidiary density) in the host market. Design/methodology/approach: The paper tests its hypotheses on a sample of foreign-owned subsidiaries operating in Saudi Arabia and Egypt. The data was collected by combining information from Bureau Van Dijk's Orbis database with company websites and other secondary sources. The final sample consisted of 156 observations – 70 MNEs-subsidiaries operating in Saudi Arabia, and 86 in Egypt. Findings: The findings confirm that foreign subsidiaries are likely to develop fewer formal political connections in a welfare-state monarchy as compared to in a developmental-state democratic system. Furthermore, formal political connections are more significant in industries that are impacted by the influence of religion – such as the financial industry in Arab countries. Finally, the extent of using political connections varies by the scale of the MNEs' investment in the host market – that is, with a greater scale of investment (or higher subsidiary density), formal political connections are greater. Originality/value: The paper contributes theoretically by explaining that a combination of institutional heterogeneity and its associated resource dependence conditions between MNEs and host governments influence MNE-subsidiaries' political connections. The paper tests its hypotheses in an emerging Arab context, which is characterized by both autocratic and semi-democratic political settings, and which makes the integration of institutional and resource dependence theories useful in explaining how MNE-subsidiaries navigate local complexities in this region. [ABSTRACT FROM AUTHOR]

Research Summary: We examine how geopolitical volatility—the instability of bilateral political affinity between countries—affects foreign subsidiary investments. Building on prior work that shows that the level of political affinity between countries facilitates foreign investments, we argue that the volatility of political affinity impedes firms' ability to form expectations about stakeholder behavior and reduces subsequent investments in subsidiaries. We further argue that the effect of volatility of political affinity on foreign subsidiary investments is less pronounced when the level of political affinity between countries is high and when the firm has strong political connections at home. Our analyses examine 1054 US firms and their subsidiary investments in 106 countries from 2000 to 2015. Managerial Summary: Geopolitical risk has emerged as an important factor in foreign investment decisions in recent years. The rise of geopolitical tensions worldwide and the fragmentation of relationships between countries have introduced new dimensions to foreign investment risks. We study the propensity for sudden and unpredictable shifts in the political relationship between countries—that is, volatility of political affinity in their bilateral political relations—and its effect on firms' foreign subsidiary investments. We show that volatility of political affinity negatively affects the number of subsidiaries, employees, and local sales in the host country because when bilateral relations change suddenly, it is more difficult for multinational firms to predict how stakeholder behavior will impact the performance of their investments. [ABSTRACT FROM AUTHOR]

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In this note we study how the share of workers in a corporation located in a high gender wage gap country impacts the wage gap in their home country operations. Our findings support the hypothesis that firms with strong intra-firm linkages to a high gender wage gap country also display a relatively large gender wage gap at home. [ABSTRACT FROM AUTHOR]

The knowledge of host-country nationals who work in the foreign subsidiaries of multinationals is a crucial strategic resource for their employers. This study explored the role that cultural intelligence plays in employees' knowledge sharing within a cross-cultural workplace context. Building on social identity theory, this study developed a theoretical framework to explore how host-country nationals' cultural intelligence could enhance their knowledge sharing via increasing their social identity, and further investigated the mediating role of host-country nationals' relationships with expatriates and identification with their organization. Using survey data from 412 host-country nationals working for 16 foreign subsidiaries in South Korea, I found that cultural intelligence directly predicted knowledge sharing. The results support and extend the extant literature and provide practical implications for multinationals regarding the management of host-country nationals. [ABSTRACT FROM AUTHOR]

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How does greenfield versus M&A FDI establishment mode influence intangible asset creation in the parent companies of Chinese MNEs undertaking overseas knowledge sourcing/strategic asset-seeking types of FDI? We hypothesise that while springboard type cross-border acquisitions provide opportunities for the rapid addition of locally embedded competence-creating foreign subsidiaries, challenges in developing intra-MNE knowledge diffusion channels may frustrate integration and thus retard subsequent growth of parent firms' intangible assets. Greenfield R&D FDI, by contrast, may initially lack local embeddedness but holds out the potential for superior intra-MNE linkages and thus reverse knowledge diffusion to the MNE parent. Our results, based upon propensity score matching and difference in difference models comparing CMNE parent outcomes for FDI projects over the 2003–2018 period, support this argument. We discuss implications for mainstream international business theorising, including springboard theory, which largely overlooks greenfield establishment mode as a means of rapid firm-level catch-up for emerging market MNEs. [ABSTRACT FROM AUTHOR]

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Based on the institutional perspective, this article examines whether institutional pressures in home and host countries affect multinational enterprise (MNE) subsidiaries' corporate social responsibility (CSR) practices and whether the institutional distance between home and host countries moderates these relationships. We collect data from 185 Chinese MNEs' 349 foreign subsidiaries operating in 27 host countries and conduct a cross-classified multilevel model analysis of the data. The findings indicate that institutional pressures in home and host countries significantly affect the CSR practices of the MNE subsidiaries operating in host countries. Also, we find that the formal and informal institutional distances between the home and host countries exert different interaction effects on these CSR practices. The findings from this study offer useful implications for MNEs' social strategies for sustainability. [ABSTRACT FROM AUTHOR]

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]

Purpose: This study examines the effects of formal institutional distance (ID) on the foreign subsidiary global mandates (i.e. the subsidiary value-added role in terms of research and development (R&D), product management and supplying of inputs to the multinational enterprise (MNE) globally). Furthermore, it examines the mediating role of subsidiary autonomy for innovation in the relationship between formal ID and subsidiary global mandates. Design/methodology/approach: Survey evidence from foreign subsidiaries in a remote developed economy, i.e. New Zealand, is obtained. Formal distance is measured based on the worldwide governance indicators (WGI), and the hypotheses are tested using structural equation modeling. Findings: Results show that the direct link between formal ID and subsidiary global mandates is negative. However, autonomy for innovation as a mediator offsets this negative relationship, showing a positive mediating effect between formal ID and subsidiary global mandates. Originality/value: This study extends research on foreign subsidiaries and their value-added roles in the MNE. We show the differentiated role of formal ID and indicate a contingency showing how the negative influence of formal ID on subsidiary global mandates can be offset. The inconsistent mediation of autonomy for innovation suggests that the concept of ID is multifaceted and complex, in contrast to the popular view that ID has only negative implications. Drawing upon evidence from a remote, developed economy and secondary data sources, we suggest how MNEs may positively use their formal ID with their subsidiaries. [ABSTRACT FROM AUTHOR]

Problem definition: As related party transactions (RPTs) increase in global supply chains, understanding the impact of corporate governance on such transactions becomes crucial for businesses. RPTs often lead to operational diversion due to power disparities between parent and its subsidiaries. In this study, we explore how operational diversion in RPTs within multinational firms is affected by the roles of foreign subsidiaries and corporate governance mechanisms. Methodology/results: Using a unique data set on RPTs of Korean multinational firms from 2006 to 2013, we compare the performance of multinational firms engaging in RPTs with two types of foreign subsidiaries: vertical and horizontal. We conduct our empirical analysis based on the adoption of International Financial Reporting Standards (IFRS) in Korea in 2011, which acts as a policy shock affecting corporate governance and deterring operational diversion. Our results show that the improvement in operational performance of a multinational firm following the IFRS adoption is more significant when the parent firm engages in transactions with vertical subsidiaries compared with horizontal ones. We further show that strong corporate governance mechanisms, such as internal governance, institutional ownership, and large shareholders, play a crucial role in restraining operational diversion in RPTs involving vertical subsidiaries. Managerial implications: The implications of our study extend to shareholders and auditors, highlighting the importance of prioritizing monitoring efforts concerning a parent firm's RPTs with vertical subsidiaries, especially when corporate governance mechanisms are weak. In contrast, RPTs with horizontal subsidiaries are relatively robust against operational diversion, making them a natural deterrent to such malpractices. Funding: This work was supported by the Institute of Management Research at Seoul National University, the Hankuk University of Foreign Studies Research Fund [2023], and the Research Fellowship Fund of the Sangnam Institute of Management, Yonsei University [2020-22-0007]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2022.0372. [ABSTRACT FROM AUTHOR]

Copyright of Journal of International Business Studies is the property of Springer Nature and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Our study examines whether the growth in patenting activity in India, spurred by policy changes such as the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), is reflected in a corresponding increase in the 'quality' of Indian patents. To investigate this, we utilise 6,777 Indian patent data granted by the United States Patent and Trademark Office (USPTO), which were filed between 1984 and 2015. Using the Cox regression methodology and citation lag as a measure, we evaluate the value of Indian patents at inventor, firm, and technology levels. At the inventor level, we find patents with the first US inventor have a shorter citation lag, indicating a higher patent value than those with the first Indian inventor. Similarly, among assignees, the subsidiaries of foreign firms tend to have a higher patent value than other assignees, including Indian firms, institutions, and universities. At the technology level, we find that patents in electrical engineering are more valuable than those in other categories, including chemistry, mechanical engineering, instruments, and other fields. Furthermore, our empirical findings support an overall increasing value of Indian patents in more recent filings, as the study demonstrates a declining citation lag trend of newly filed patents. [ABSTRACT FROM AUTHOR]

Purpose: The main goal of the article is to determine the mediating role of human resources management (HRM) outcomes in the relationships between shaping employee work engagement and job satisfaction (SEWE&JS) and company performance results and to establish whether there are any identifiable regularities in this scope in the pre-pandemic and pandemic period in the headquarters (HQs) and foreign subsidiaries of multinational companies (MNCs). Design/methodology/approach: The empirical research included 200 MNCs headquartered in Central Europe. The raw data in the variables were adjusted with the efficiency index (EI) to capture the actual relations between the variables under study. The partial least squares structural equation modeling (PLS-SEM) was used to verify the research hypotheses and assess the mediating effects. Findings: The research findings show that the HRM outcomes positively mediate the relationships between SEWE&JS and the company performance results. HRM outcomes turned out to be a stronger mediator between SEWE&JS and company performance results in finance and quality in the HQs during the pandemic. By contrast, in the local subsidiaries, they were a stronger mediator of the relationships between the results in innovativeness and quality during the pandemic. Originality/value: In addition to confirming the results of some other researchers, the research findings also provide new knowledge. They determine the mediating role of HRM outcomes in the relationship between SEWE&JS and the three categories of company performance results, namely finance, innovativeness and quality. In addition, they identify certain regularities in the four studied contexts, which is a novelty in this type of research. A novelty is also the use of employee key performance indicators (KPIs) in the data analysis as the efficiency index in analyzing the effect of the variables under study. The value of the research is also the fact that it covers HRM in MNCs established in Central Europe, which, compared to MNCs from the Western world, is not a frequent subject of research. [ABSTRACT FROM AUTHOR]

Despite growing concern in the social innovation (SI) literature about the tackling of grand challenges, our understanding of the role of multinational enterprises (MNEs) remains in its infancy. This article examines foreign MNE subsidiaries' SI investments focusing on United Nations' Sustainable Development Goals (UNSDGs) in host countries. Using financial data from large, listed subsidiaries of foreign MNEs operating in India, along with hand-collected data from firms' disclosures of corporate social responsibility (CSR) activity for five years starting in 2015, we utilise the externalities framework propounded by Montiel et al. (2021). This neatly translates the 17 UNSDGS into actionable goals to examine the efforts of foreign MNE subsidiaries in increasing positive externalities as opposed to reducing negative externalities via SI-related investment in host countries. The study also evaluates the effects of the local embeddedness of the foreign MNE subsidiaries on SI investment. We find that MNE subsidiaries tend to favour increasing positive externalities as compared to reducing negative externalities through their SI investments. Also, older subsidiaries tend to prioritize greater investments in SI projects related to reducing negative externalities and subsidiaries with higher MNE ownership tend to reduce investments in SI projects related to increasing positive externalities. We discuss possible interpretations of the exploratory results using the institutional logics perspective and conclude with implications for policy and future research. [ABSTRACT FROM AUTHOR]

We show that multinational firms transmit shocks across countries through their internal capital markets. We study a credit supply shock to parent firms in Germany. International affiliates outside Germany supported their parents through internal lending, became financially constrained themselves, and experienced lower real growth. We find that managers were "Darwinist" with respect to international affiliates but "Socialist" in the home country, that internal capital markets transmitted the credit shock more strongly than a nonfinancial shock, and that access to developed credit markets attenuated the real effects. The total real impact of shock transmission through multinationals on foreign economies was large. [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]

Multinational enterprises' increased dependence on work-enabling technologies to manage global operations may contribute to foreign subsidiary employees' techno-stress (i.e., stress from interacting with technology). However, techno-stress may have either a positive or negative effect on employee and customer engagement, depending on the employee's appraisal of the techno-stressors. Drawing on transactional stress theory, the authors provide a conceptual model and research propositions to introduce the concept of techno-stress to international marketing scholars. The authors explore the role of the information systems environment and culture in employees' appraisal of techno-stressors and their ultimate effects on employees' well-being and performance. These propositions aim to encourage research that provides a fuller context of the technology-related challenges that multinationals may face in building employee and customer engagement across their subsidiary networks. [ABSTRACT FROM AUTHOR]

Purpose: Linguists classify the world's languages into two types: futured and futureless. Futured languages (e.g. French) require speakers to grammatically mark future events, a construction that is optional in futureless languages such as German. This treatise examines whether the grammatical structure of the predominant language in a given country explains firms' propensity to engage in controversial marketing and environmental management practices. This is expected to happen because a speaker's future time perspective and temporal discounting vary depending on the type of language used. Design/methodology/approach: The sample period for this research was from 2001 to 2020. The sample of the study consists of 5,275 firms representing 47 countries. The sample is comprised of firms from 29 countries where the predominant language is a strong future time reference (FTR) language and 18 countries with a weak-FTR language. The maximum number of firm-country-year observations of the study was 39,956. This study employed multi-level mixed effects modelling as well as other relevant estimation techniques such as random effect panel regression, ordinary least square regression and two-stage least square regression. Findings: This research empirically demonstrates that firms based in countries where the predominant language requires speakers to grammatically differentiate between the present and the future – known as strong-FTR or futured languages – engage more often in controversial marketing- and environment-related practices than those located in countries where the predominant language does not necessarily require grammatical differentiation between the present and the future (known as weak-FTR or futureless languages). Practical implications: The findings are important for managers of firms with foreign subsidiary operations: top management teams of such firms need to be aware that their foreign subsidiaries' propensity to engage in controversial marketing and environmental management practices varies depending on the predominant language those subsidiaries use. Also, firms located in countries with weak-FTR languages need to be more rigorous in their selection process when considering forming a joint venture or acquiring a firm in countries with strong-FTR languages. Originality/value: The current research enriches the burgeoning body of literature on the effect of language on corporate decision-making. It extends the body of knowledge on the impact of language structure on firms' inclination to engage in controversial marketing and environmental management practices. [ABSTRACT FROM AUTHOR]

Purpose: This paper examines how a firm's hierarchical complexity, which is determined by the way it organizes its subsidiaries across the hierarchical levels, can impact its stock price crash risk. Design/methodology/approach: The authors employ a measure of hierarchical complexity that captures the depth and breadth of how subsidiaries are organized within a firm. This measure is calculated using information about firms' subsidiaries extracted from the Bureau van Dijk (BvD) database that allows the authors to construct each firm's hierarchical structure. The data sample includes 2,461 USA firms for the period from 2012 to 2017 (11,006 firm-year observations). Univariate tests and panel regression are used for the main analysis. Two-stage-least-squares (2SLS) instrumental variable regression and various other tests are employed for robustness check. Findings: The results show a positive relationship between hierarchical complexity and stock price crash risk. This relationship is amplified in firms with a greater number of subsidiaries that are hierarchically distanced from the parent company as well as in firms with a greater number of foreign subsidiaries in countries with weaker rule of law. Originality/value: This paper is the first to investigate the impact hierarchical complexity has on crash risk. The results highlight the role that a firm's organizational structure can have on asset pricing behavior. [ABSTRACT FROM AUTHOR]

International business scholars have long recognized the potential influence of cultural differences on foreign divestment; however, the empirical results are mixed. Our study helps resolve this contradiction and contribute to the existing literature in three ways. First, we advocate the use of cultural friction metric, instead of the more traditional cultural distance approach. This overcomes a key limitation in the modelling the impact of cultural differences. The friction construct metric includes an index of firm-specific factors, referred to as the degree of 'cultural interaction'. This index moderates the impact of cultural distance, reflecting firm—level differences. We also build on calls for more Positive Organizational Scholarship by challenging the negative bias in the international business literature and propose a curvilinear effect of cultural differences on divestment probability. Lastly, we investigate a potential boundary condition—the moderating effect of entry mode on the main hypothesis. Our empirical sample include 2120 Finnish foreign subsidiaries operating in 40 countries during 1970–2010. Our analyses confirm that the cultural differences, when measured by the friction metric, appear to be a significant and superior predictor of subsidiary divestment probability, and that the relationship appears to be U-shaped. Our robustness analyses also highlight the importance of which cultural framework is applied and controlling for selection bias. [ABSTRACT FROM AUTHOR]

Does international R&D collaboration produce patents of higher technological value? Applied to the case of Siemens, this paper utilizes the Patent Cooperation Treaty (PCT) and Google Patents statistics to identify patterns within invention and co-invention. For example, sole patenting by headquarters or subsidiaries is juxtaposed with co-invented patent filings, vertical versus horizontal co-patented applications and internal versus external. The paper compares the effect of different forms of co-invention on the technological value of patent filings, proxied by forward external citations. The results are based on 2013 and 2019 Siemens PCT data and confirm the positive effect of international co-invention, vis-à-vis sole patenting, on the technological value of patents. Patent applications co-invented by foreign subsidiaries, or vertically collaborated applications, create higher technological value, while headquarters or single subsidiaries generate fewer forward citations. Moreover, co-patenting by subsidiaries with external partners creates higher technological value than sole patenting by headquarters. Siemens has recognized the value of partnerships with outside inventors and leveraged these relationships in order to generate higher technological value. We contribute by building a unique and detailed classification of co-patenting patterns, and the paper develops a strong case for cross-country co-patenting, especially with external partners. From a managerial perspective, international co-patenting involving external partners has strategic value and must be fostered. [ABSTRACT FROM AUTHOR]

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Purpose: Recent international business research finds that state-owned multinational enterprises (SOMNEs) invest relatively more in politically risky host countries than do privately-owned multinational enterprises (MNEs). This study aims to investigate theoretically and empirically whether state ownership mitigates the impact of host-country political risk on subsidiary economic risk. Design/methodology/approach: The authors link theoretical arguments on state ownership to arguments from non-market strategy literature to outline mechanisms whereby state ownership can buffer subsidiaries from political risk, weakening the link between host-country political risk and earnings volatility in subsidiaries. Using a data set on Norwegian MNEs' foreign subsidiaries across almost two decades, the authors test this prediction using both matching methods and panel regressions. Findings: While standard panel regressions provide empirical support only for the infrastructure sector and for the highest political risk contexts, nearest-neighbour matching models – comparing only otherwise similar private- and SOMNE subsidiaries using the full sample – reveal more general support for the political risk mitigation hypothesis. Originality/value: The study presents the first comprehensive analysis of whether state ownership can mitigate the effect of political risk on subsidiary economic risk. [ABSTRACT FROM AUTHOR]

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Purpose: This research aims to provide a new perspective on the evolving linkages between LAs and FSAs in the context of the technology-based manufacturing industry. Firm-level competitive strengths in an international context build upon the combination of (largely) exogenous location advantages (LAs) and endogenous firm-specific advantages (FSAs). The authors focus especially on the decay of LAs over time, which has been observed in many highly developed countries during the past decades. The authors show how the strengthening of FSAs can substitute for decaying LAs, thereby safeguarding against the demise of entire industrial regions. Design/methodology/approach: The authors examine the technology-based manufacturing industry in Belgium, building upon an analysis of survey responses by 66 firms including a subgroup of 26 multinational enterprise (MNE) subsidiaries. The professional association representing this industry in Belgium (Agoria) viewed the firms included in the survey as representative for Belgian technology-based manufacturing in terms of the LAs they presently build upon (or location disadvantages they face) and the internal strengths they command relative to (foreign) rivals. The investigation uncovered the decay of critical LAs in Belgium and in parallel, the rise of 'compensating' FSAs of Belgian operations relative to foreign firms, including, especially, MNE sister subsidiaries in other countries. The authors also conducted 23 in-depth interviews with senior level managers (CEOs and senior vice presidents) of technology-based firms, including 10 subsidiaries of foreign-owned MNEs, which validated our analysis of the interplay between LAs and FSAs. Findings: The findings reveal that since inception, Belgian manufacturing operations experienced an overall decay in their critical LAs by 23% on average. Despite this, several Belgian subsidiaries of foreign MNEs consider themselves as commanding a resource-base superior to that of the next-best-in-class subsidiaries. Furthermore, when assessing the dynamic interplay between LAs and FSAs, there is some evidence that the decay of LAs fueled the quest for – and firm-level journey toward – stronger FSAs. Originality/value: The originality of this study is the alternative perspective to the conventionally assumed "positive-positive" relationship between LAs and FSAs. Prior management research has not examined the impact of decaying LAs on new FSA-creation in the realm of technology-based manufacturing. [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]

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper examines the cross-national transfer of HRM practices at Up Group, an emblematic French multinational worker co-op. Our findings reveal that stakeholder pressure to disseminate the co-op's core HRM practices to its foreign subsidiaries triggered two key strategic responses from the HQ member-owners: transfer circumvention and ceremonial transfer. Therefore, our study provides new insights into the political and contested nature of practice transfer by elucidating how MNCs actively engage in the selective and differential transfer of some of their core HRM practices to protect the HQ actors' interests and preserve their position of power vis-à-vis the subsidiaries. In addition, our fine-grained analysis of the ceremonially transferred practices contributes to the literature on practice variation during diffusion processes in MNCs. Finally, by examining the challenges of the cross-national management of people in multinational worker co-ops, an increasingly important global player, this study addresses critical management scholars' calls to broaden the horizons of IHRM research beyond the hegemonic analysis of for-profit shareholder-owned MNCs. [ABSTRACT FROM AUTHOR]

Knowledge transfer from a parent multinational to a foreign subsidiary does not automatically lead to innovation in a host country. To develop from a learner into an innovator, a foreign subsidiary must develop sufficient absorptive capacity. But too much reliance on knowledge transferred from a multinational could hinder local innovation by generating resource constraints and organizational rigidity. We thus predict an inverted U-shaped relationship between knowledge transfer from a parent multinational and local innovation. Moreover, factors which influence the transition from learner to innovator were investigated using data on patent applications by foreign subsidiaries of 75 large multinationals in China between 2008 and 2016. The number of research and development centers the subsidiary maintains was found to be influential, as is hiring a local executive as the subsidiary's top manager. Greater institutional distance between the parent's and the subsidiary's economies was found to promote the transition, as do greater technological richness and more vigorous competition in the host country. The relationship between knowledge transfer from a parent multinational and local innovation is weaker, however, in older subsidiaries. [ABSTRACT FROM AUTHOR]

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Copyright of Die Unternehmensbesteuerung (Ubg) is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Research Summary: When can a firm make fine‐grained adjustments to misaligned subsidiary governance? We examine whether and under what conditions a firm will adapt the equity stake it owns in a subsidiary, enabling improved alignment of the stake with the uncertainty in the local environment. We predict that the rate of adaptation of misaligned equity stakes depends on the experiential and vicarious learning from which the firm can draw, and that these learning effects are contingent on possessing fungible slack resources, specifically cash. Using a sample of 726 Japanese‐foreign subsidiaries established in 38 host countries over a 21‐year period, we find support in line with our predictions. Overall, this study explicates heterogeneous adaptability in subsidiary governance and similar strategic tasks. Managerial Summary: Whether due to suboptimal choices or changing conditions, firms must sometimes change how they relate with and control their subsidiaries. Whereas much research has addressed adaptation in the form of discrete changes in ownership mode, we examine under what conditions a firm can make fine‐grained adjustments to misaligned subsidiary governance. We argue that a firm can learn to make such adjustments, not only from its own experience but also vicariously by observing other firms in the same foreign environment. Furthermore, we consider whether cash is a valuable resource for this purpose. Overall, this study shows how firms can pursue strategic adaptation in subsidiary governance and related tasks. [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]

Purpose: The purpose of this paper is to explore the scope for action of local human resource managers, who are employed in foreign subsidiaries of multinational companies (MNCs), for implementing training activities. These managers are situated in relationships to headquarters and the local environment. Related to this is the question whether MNCs contribute to the local skill base by implementing training activities or whether they exploit the existing skill formation system. Design/methodology/approach: This study focusses on German subsidiaries of MNCs with headquarters in the USA and the UK, France, China and Japan. The study is based on 107 expert interviews with subsidiary managers and representatives of local stakeholder organisations, such as educational organisations, chambers, economic promotion agencies and governmental bodies in Germany. Findings: The study reveals that headquarters introduce general schemes for training. In addition to these MNC-internal trainings, local managers use their information advantage over headquarters to implement dual training activities. Research limitations/implications: The training activities of subsidiaries are dependent on the institutional settings of the host country. Practical implications: Albeit dual training activities are laborious and tie the local managers down for the medium and long term, the future need of the subsidiary for adequately skilled workforce prompts local managers' engagement in implementing dual training activities. Social implications: Subsidiaries contribute to the local skill base and do not act in a free-rider position, at least in the German variety of capitalism. Originality/value: The study deepens insights on distanced relations within and how subsidiaries generate scope for action by using this kind of relationships. [ABSTRACT FROM AUTHOR]

Purpose: Leadership talent management (LTM) is one of the crucial aspects of HRM nowadays, which can decide of an organization success. This effect is considered in four types of contexts, i.e. in the headquarters (HQs) of multinational companies (MNCs) in the prepandemic and pandemic period of COVID-19, and in the foreign subsidiaries of these MNCs also in the pre-pandemic and pandemic period of COVID-19. The main goal of the article, identified with the main research problem, is to determine the mediating role of HRM outcomes in the relationships between LTM and company performance results and to establish whether there are any identifiable regularities in this scope in the pre-pandemic and pandemic period of COVID-19 in the HQs and foreign subsidiaries of MNCs. Design/methodology/approach: The research sample covered 200 nonfinancial business entities headquartered in a Central European country with their subsidiaries located around the World. The research was conducted using Computer Aided Telephone Interview method. The Partial Least Squares Structural Equation Modeling (PLS-SEM) was used to verify the research hypotheses and assess the mediating effects. Findings: What was found in the course of the work? This will refer to analysis, discussion, or results. The mediating role of HRM outcomes in the relationships between LTM and the company performance results has been determined and some regularities in this scope in the pre-pandemic and pandemic period of COVID-19 in the HQs and foreign subsidiaries of MNCs have been identified. The mediating role of HRM outcomes is important in each of analyzed contexts, but during a pandemic, the company's performance results in HRM mediate the relationships between LTM and the company's performance results stronger than in the prepandemic time. Practical implications: The research outcomes lead to the conclusion that in difficult conditions the specific focus on HRM can be an important factor improving the company’s performance results. Originality/value: What is new in the paper? State the value of the paper and to whom it is addressed. The research is of an innovative character, identifies some general scientific laws and describes the aspects that haven’t been studied yet. The originality of own research focused on LTM, mediating role of HRM outcomes in HQs and foreign entities of MNCs are difficult to compare with similar studies. In addition, the article presents an innovative approach to taking into account employee KPIs as an indicator of performance. [ABSTRACT FROM AUTHOR]

Engaging local employees in foreign subsidiaries has emerged as a critical concern for Chinese multinational enterprises (MNEs). This study employs the theoretical framework of culture fit to conduct an inductive multiple-case study of Chinese subsidiaries in the United States. We examine how culture fit between the organizational and societal levels is manifested through human resource management practices at the foreign subsidiaries of Chinese MNEs. Particularly, we demonstrate how culture fit or misfit influences the intellectual, social, and affective engagement outcomes of local employees at the individual level. This study extends the understanding of culture fit across multiple levels and its direct impact on employee engagement. The findings provide valuable managerial implications for global human resource managers to effectively engage their culturally diverse workforces. [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]

We investigate the effect of R&D subsidies on firms' innovation by ownership, industry, and firm size using German firm-level data. The impact of R&D subsidies is heterogeneous across industries for multinational corporations (MNCs) and domestic firms. This heterogeneity is robust using various estimators. Domestic firms have a larger response in R&D spending in low-tech and medium-term manufacturing, while the effect in high-tech manufacturing is larger for both domestic and foreign MNCs. In knowledge-intensive services and technological services, the response of domestic firms and in some cases foreign MNCs, is greater than that of domestic MNCs. In terms of patents, foreign MNC subsidiaries tend to have a larger count in high-tech manufacturing. [ABSTRACT FROM AUTHOR]

Legitimacy in foreign markets, a concept rooted in institutional theory, has traditionally been examined for firms originating from advanced economies. However, it becomes more complex for firms from emerging and post-transition economies. Polish firms began establishing foreign subsidiaries after the accession to the EU, primarily in European markets. In this context, Germany was a key destination for Polish foreign direct investment (FDI). However, scholarly literature about foreign subsidiaries established or acquired by Polish firms is limited. This article presents the analysis of the legitimation strategies employed by post-transition country firms in advanced economies, using Polish subsidiaries in Germany as empirical cases. The empirical context is chosen due to its economic significance and the close linkages between Poland and Germany. With a conceptual framework, the authors synthesise legitimation strategies discussed in scholar literature and highlight some unique challenges for post-transition economy’s firms. The article presents outcomes from a qualitative study, extending the framework and offering some fresh perspectives in the field of international business legitimacy.

Copyright of FinanzRundschau is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Purpose: This study aims to investigate whether and why multinational corporations (MNCs) seek to reduce institutional costs of foreign direct investments (FDIs) by aligning with transnational political frameworks. Design/methodology/approach: This study uses the Chinese Belt and Road Initiative (BRI) to test whether MNCs' subsidiaries in China increase FDI into BRI-affiliated countries after the BRI's launch. This study compares FDIs by Chinese subsidiaries of foreign MNCs in the year before and two years after the BRI's announcement. Hypotheses are tested for two explanations of why foreign MNCs seek to exploit the BRI. Findings: Investments into BRI-affiliated countries increased after the announcement of the BRI, and this increase is positively moderated by institutional distance between the MNC home country and the BRI-affiliated target country. This shows that the greater the institutional costs of investing in a BRI-affiliated country, the more responsive the MNCs' Chinese subsidiary will be to the BRI. Research limitations/implications: This study demonstrates that MNCs respond to transnational political frameworks. This study only studies the immediate response because the BRI is an infrastructure project. Better infrastructure will, over time, lead to more investments; however, the immediate response is due not to infrastructure but political structure. Originality/value: The results show how MNCs use transnational political frameworks. The idea that MNCs can channel FDI through existing subsidiaries for this purpose has not previously been discussed in the literature. [ABSTRACT FROM AUTHOR]