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Internationalization speed and subsidiary survival of EMNCs: The moderating roles of CEO international experience and state ownership

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  • Yi, Changjun
  • Zhang, Jipeng
  • Zhan, Yun
  • Yan, Xiaojuan
  • Chen, Chusheng

Abstract

In the process of internationalization, effective management of dispersed location-specific knowledge is the key to successful internationalization strategies for companies. Rapid internationalization often prevents multinational corporations (MNCs) from absorbing and internalizing internationalized knowledge in a timely manner and achieving ideal performance. Compared with MNCs in developed countries, emerging market multinationals (EMNCs) are more inclined to implement a rapid internationalization strategy to enhance their own competitive advantage. However, their internationalization process is limited by their lack of managerial resources. Why and how would internationalization speed impact the survival of EMNCs Subsidiary? Using the survival analysis method and taking the Chinese A-share listed companies as empirical setting, our results show that the internationalization speed negatively affects the survival of EMNCs Subsidiary; Both CEO international experience and state ownership weaken the negative impact of internationalization speed on the survival of EMNCs Subsidiary. We argue that rapid internationalization underestimates the Penrose effect in the process of internationalization, that is, underestimates the managerial resources required to learn and accumulate absorptive capacity, and effectively manage dispersed knowledge. Based on the dual context of dispersed knowledge management and managerial constraints, this paper expands the understanding of the impact mechanism of internationalization speed on corporate performance, and also has certain guiding significance for the selection of internationalization speed of EMNCs.

Suggested Citation

  • Yi, Changjun & Zhang, Jipeng & Zhan, Yun & Yan, Xiaojuan & Chen, Chusheng, 2021. "Internationalization speed and subsidiary survival of EMNCs: The moderating roles of CEO international experience and state ownership," Journal of Asian Economics, Elsevier, vol. 77(C).
    • Handle: RePEc:eee:asieco:v:77:y:2021:i:c:s1049007821000695
    DOI: 10.1016/j.asieco.2021.101340
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