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How Do Emerging Multinational Enterprises Release Subsidiary Initiatives Located in Advanced Economies?

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  • Yang, Xiaoming
  • Sun, Sunny Li
  • Jiang, Fuming

Abstract

We revisit the relationship between headquarters and subsidiaries under the context of emerging multinational enterprises (EMNEs) and develop a new model for releasing the subsidiary initiative, a significant form of corporate entrepreneurship activities hosted in advanced economies. Drawing upon institutional theory and corporate entrepreneurship theory, we argue that mutual trust between headquarters and subsidiaries serves as a mediating mechanism linking formal institutional distance and subsidiary initiatives. Meanwhile, we propose that communication effectiveness between headquarter and subsidiary plays as a moderator upon such relationships. Communication between the headquarters and the subsidiary positively moderates the relationship from formal institutional distance to trust. A sample including 232 EMNEs with headquarters in China and subsidiaries in advanced economies largely support our model on subsidiary initiative. Our model provides a solution to the global integration-local responsiveness paradox.

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  • Yang, Xiaoming & Sun, Sunny Li & Jiang, Fuming, 2021. "How Do Emerging Multinational Enterprises Release Subsidiary Initiatives Located in Advanced Economies?," Journal of International Management, Elsevier, vol. 27(1).
    • Handle: RePEc:eee:intman:v:27:y:2021:i:1:s1075425321000168
    DOI: 10.1016/j.intman.2021.100836
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