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Unbundling the effects of host-country institutions on foreign subsidiary survival: A case for subsidiary heterogeneity

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  • Getachew, Yamlaksira S.
  • Beamish, Paul W.

Abstract

This study seeks to advance a fine-grained understanding of the relationship between host-country institutions and foreign subsidiary survival by unbundling institutions into contracting and property rights institutions as well as engaging subsidiary-level heterogeneity. We argue that the adverse effects of weak contracting institutions are stronger for market-seeking subsidiaries. In contrast, we contend that weak property rights institutions are more detrimental to the survival of resource-seeking subsidiaries. Data from a longitudinal, paired-sample design of Japanese foreign subsidiaries operating across 46 countries provide support for these arguments. The results underscore the need to better understand institutional diversity as well as subsidiary heterogeneity.

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  • Getachew, Yamlaksira S. & Beamish, Paul W., 2021. "Unbundling the effects of host-country institutions on foreign subsidiary survival: A case for subsidiary heterogeneity," Journal of World Business, Elsevier, vol. 56(4).
    • Handle: RePEc:eee:worbus:v:56:y:2021:i:4:s1090951621000389
    DOI: 10.1016/j.jwb.2021.101226
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