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The effects of an MNC subsidiary's integration and local responsiveness on its performance: an empirical study of Taiwanese enterprises' subsidiaries

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  • Cher-Hung Tseng
  • Yeun-Wen Chang

Abstract

The continuing trend of industrial globalisation and the apparent attractiveness of foreign markets have prompted an increasing number of Taiwanese enterprises to accelerate their transition toward a fully international operation by establishing foreign subsidiaries. In analysing 53 foreign subsidiaries of Taiwanese enterprises, this study explores the effects of a subsidiary's integration and local responsiveness on its performance. The current analysis reveals that a subsidiary's integration with its parent company and its local responsiveness both have a positive influence on its performance. Furthermore, the industry's global integration has a positive moderating effect on the relationship between a subsidiary's integration and its performance. Meanwhile, the wholly owned subsidiary entry mode has a negative moderating effect on the relationship between a subsidiary's local responsiveness and its performance.

Suggested Citation

  • Cher-Hung Tseng & Yeun-Wen Chang, 2005. "The effects of an MNC subsidiary's integration and local responsiveness on its performance: an empirical study of Taiwanese enterprises' subsidiaries," International Journal of Business Performance Management, Inderscience Enterprises Ltd, vol. 7(4), pages 409-425.
  • Handle: RePEc:ids:ijbpma:v:7:y:2005:i:4:p:409-425
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    Cited by:

    1. Ziyi Wei & Quyen T. K. Nguyen, 2020. "Local responsiveness strategy of foreign subsidiaries of Chinese multinationals: The impacts of relational-assets, market-seeking FDI, and host country institutional environments," Asia Pacific Journal of Management, Springer, vol. 37(3), pages 661-692, September.
    2. Johnson, Julius H. & Arya, Bindu & Mirchandani, Dinesh A., 2013. "Global integration strategies of small and medium multinationals: Evidence from Taiwan," Journal of World Business, Elsevier, vol. 48(1), pages 47-57.

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