Session 37

Subsidiary Strategy

Track G

Date: Tuesday, October 9, 2012

 

Time: 08:00 – 09:15

Paper

Room: North Hall


Session Chair:

  • Andrew Delios, National University of Singapore

Title: Creating Shareholder Value in MNE Subsidiaries

Authors

  • Nicholas O'Regan, University of the West of England
  • Abby Ghobadian, University of Reading
  • Gerhard Kling, University of Southampton

Abstract: This paper explores how foreign subsidiaries of MNEs differ from domestic peers in R&D investment, technical efficiency and shareholder value creation. Both foreign subsidiaries and divisions of domestic firms can access resources/capabilities of their respective parent firms. We distinguish between three sub-groups of local firms: domestic MNEs, divisions of domestic firms and independent domestic firms. We quantify the transfer of resources and capabilities by exploring the parent companies’ access to capital, loans provided to subsidiaries, ownership structure and similarity of operations. Our findings indicate that foreign subsidiaries do not invest more in R&D and are less cost-efficient than local peers. However, they excel in labour efficiency. The characteristics of parent companies play a major role in the contribution of subsidiaries to shareholder value creation.

Title: Factors Market Concentration and Subsidiary Embeddedness

Authors

  • Ulf Andersson, Mälardalen University
  • Grazia Santangelo, University of Catania

Abstract: Research in the resource-based view tradition has long recognized the relevance of imperfect and incomplete factors markets for firm’s sustained competitive advantage. This recognition is the conceptual starting point of the external network view of the firm. Surprisingly, extant research in the external network tradition has overlooked the strategic influence of factors market conditions on firm’s networking behavior. We aim to advance this stream of research, and propose a conceptual model illustrating the degree of subsidiary business embeddedness under varying levels of factors market concentration, and the moderating effects of subsidiary role and parent-subsidiary relationships. Drawing on a sample of Swedish subsidiaries in North America and Europe, we find empirical support for our conceptual argument.

Title: Knowledge Flows from Foreign Subsidiaries: The Tension between Knowledge Creation and Knowledge Protection

Authors

  • Alessandra Perri, Ca' Foscari University of Venice

Abstract: This paper analyzes the MNC subsidiaries’ trade-off between the need for knowledge creation and the need for knowledge protection, and relates it to the extent of knowledge outflows generated within the host-location. Combining research in International Business and Strategy with Social Theory, we argue that subsidiaries that source more from the local knowledge network are also more likely to generate knowledge outflows to local firms, due to the willingness to build the trust that facilitates the establishment of reciprocal knowledge linkages. However, when subsidiaries enjoy high knowledge quality, the need for knowledge protection overweighs the need for knowledge creation, thus reversing the effects of reciprocity in knowledge exchanges, and reducing the extent of local knowledge outflows.

All Sessions in Track G...

Sun: 08:00 – 09:15
Session 129: Strategy Implementation: Global Challenges
Sun: 09:30 – 10:45
Session 130: Practicing Strategy in Transition Economies: Reframing, Rethinking and Renewing
Sun: 11:15 – 12:30
Session 131: Global Strategies in the Service Sector
Sun: 15:15 – 16:30
Session 29: Strategy and Outsourcing
Mon: 08:00 – 09:15
Session 32: The Dynamics of Internationalization
Mon: 09:30 – 10:45
Session 34: Emerging Market/Advanced Market Strategic Interactions
Mon: 13:30 – 14:45
Session 33: Internationalization, Diversification & Performance
Mon: 16:30 – 17:45
Session 35: Entry Modes, Exit and Outcomes
Session 39: Global Strategies
Tue: 08:00 – 09:15
Session 37: Subsidiary Strategy
Tue: 11:00 – 12:15
Session 41: International M&A as an Entry Mode Strategy
Tue: 14:15 – 15:30
Session 30: Politics, Institutions, Political Risk & Global Strategy
Tue: 15:45 – 17:00
Session 40: Knowledge, Innovation and Global Strategy
Session 42: A Q&A with Pilsner Urquell: Strategy from a Small Nation
Tue: 17:30 – 18:45
Session 38: Global Managers and Managing Globally


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