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Host-country Headquarters of U.S. Firms in China: An Empirical Study

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  • Pan, Yigang
  • Teng, Lefa
  • Yu, Mingyang
  • Lu, Xiongwen
  • Huang, Dan

Abstract

Recent studies show that large multinational enterprises (MNEs) adopt an organizational unit, called host-country headquarters (HCHQ), in key foreign countries (Ma and Delios, 2010; Ma, Delios and Lau, 2013). In this study, we examine the factors that are associated with the establishment of an HCHQ by US firms in China. We hypothesize that an HCHQ is associated with both firm-specific factors and host country-specific factors. We find that an HCHQ is associated with the firm's scope diversification and degree of internationalization, and the strategic importance of foreign host country and subsidiary diversification in that host country. The findings are based on archival data of U.S. Fortune 500 firms. The findings add to the understanding of an important organizational structure of large U.S. firms in China, and possibly to MNE structures more widely in key foreign countries.

Suggested Citation

  • Pan, Yigang & Teng, Lefa & Yu, Mingyang & Lu, Xiongwen & Huang, Dan, 2014. "Host-country Headquarters of U.S. Firms in China: An Empirical Study," Journal of International Management, Elsevier, vol. 20(4), pages 379-389.
    • Handle: RePEc:eee:intman:v:20:y:2014:i:4:p:379-389
    DOI: 10.1016/j.intman.2014.02.002
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    2. Hutzschenreuter, Thomas & Harhoff, Philippa-Luisa, 2021. "The accelerating effect of institutional environment unfamiliarity on subsidiary portfolio expansion in a new host country," International Business Review, Elsevier, vol. 30(3).
    3. Teng, Lefa & Huang, Dan & Pan, Yigang, 2017. "The Performance of MNE Subsidiaries in China: Does It Matter to Be Close to the Political or Business Hub?," Journal of International Management, Elsevier, vol. 23(3), pages 292-305.
    4. Tomi Laamanen, 2019. "Dynamic attention-based view of corporate headquarters in MNCs," Journal of Organization Design, Springer;Organizational Design Community, vol. 8(1), pages 1-15, December.
    5. Andrews, Daniel S. & Fainshmidt, Stav & Ambos, Tina & Haensel, Kira, 2022. "The attention-based view and the multinational corporation: Review and research agenda," Journal of World Business, Elsevier, vol. 57(2).
    6. Yi Wang & Yingming Zhu & Maojun Yu, 2023. "Identification of the most suitable areas for the development of headquarters economy in China: a theoretical framework and empirical case study," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(10), pages 11487-11515, October.
    7. Xufei Ma & Andrew Delios & Shu Yu, 2020. "Innovation in MNC’S strategy and structure: the (re) emergence of host country headquarters in large emerging markets," Asia Pacific Journal of Management, Springer, vol. 37(3), pages 609-632, September.
    8. Sewak, Mayank & Sharma, Anurag, 2020. "Performance implications of MNE subsidiary federation: Evidence from India," Journal of International Management, Elsevier, vol. 26(1).

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