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Intra-firm Subsidiary Grouping and MNC Subsidiary Performance in China

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  • Xu, Junqian
  • Huang, Dan
  • Pan, Yigang

Abstract

Many multinational corporations (MNCs) operate multiple subsidiaries in a foreign country. Drawing upon literature of organizational network and business group, we hypothesize that the number of subsidiaries of an MNC has an impact on subsidiary financial performance in China. We further hypothesized two moderating effects, namely subsidiary's country of origin and subsidiary size. The results show that subsidiary grouping effect is more salient for subsidiaries from Japan and South Korea, and that larger subsidiaries are less affected by the subsidiary grouping effect. Our empirical results were based on a sample of 40,315 MNC subsidiaries in China. The findings underscore the importance of group-based competitive advantages of MNC subsidiaries in international business.

Suggested Citation

  • Xu, Junqian & Huang, Dan & Pan, Yigang, 2019. "Intra-firm Subsidiary Grouping and MNC Subsidiary Performance in China," Journal of International Management, Elsevier, vol. 25(2), pages 1-1.
    • Handle: RePEc:eee:intman:v:25:y:2019:i:2:7
    DOI: 10.1016/j.intman.2018.10.001
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    Cited by:

    1. Thomas Hutzschenreuter & Philippa-Luisa Harhoff, 2020. "National capital city location and subsidiary portfolio expansion: The negative effect of geographic distance to the capital city at inception on the speed of subsequent investments," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(7), pages 1107-1132, September.
    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. Garg, Garima & Sewak, Mayank & Sharma, Anurag, 2022. "Learning from Older Siblings: Impact On Subsidiary Performance," International Business Review, Elsevier, vol. 31(3).
    4. 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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