Eect of operating multiple aliates on the performance of subsidiaries in the same host country

Lile has been reported on the eect of aliates on their foreign subsidiary performance. In the context of multinational banks (MNBs), we empirically investigate how the establishment of multiple aliate forms aects the performance of their subsidiaries in the same host country. We also examine the factors inuencing and eective entry mode choices. Based on the transaction cost theory, we hypothesize that MNBs can benet foreign subsidiaries using entry modes based on cost minimization and value maximization. For the period 2005–2015, we test this hypothesis on a sample of 897 subsidiaries established by 98 MNBs across 147 countries. e results show that the simultaneous operation of multiple aliate forms positively inuences their foreign subsidiary’s performance. e transaction costs determine MNBs’ entry choices. MNBs can enhance their subsidiary’s performance using entry modes considering institutional and cultural contexts and achieving cost and value targets in the host country. is study has policy implications in that it calls for collaboration between host and home countries to develop eective supervision and resolution regimes for MNBs operating multiple aliate forms in host countries.