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Experience, environment, and subsidiary performance in high-tech MNEs

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  • Wu, Wann-Yih
  • Lin, Ching-Yi

Abstract

This study investigates an inverted U-shaped relationship between host country experience and subsidiary performance, and further explores the contingent relationship of host country experience and subsidiary performance under industrial and environmental contexts. In examining a sample of the 1596 Taiwan's electronics MNEs, this study finds that host country experience shows an inverted U-shaped effect on subsidiary profitability. When considering the industry similarity, this result demonstrates that the host country experience has stronger diminishing marginal returns on a focal subsidiary profitability in similar industries at high levels of experience. This study further examines the interaction effect of environmental contexts and host country experience on subsidiary profitability in similar industries, the results shows that the interaction effect of environmental difficulties and host country experience positively impacts subsidiary profitability, while the interaction effect of cultural distance and host country experience insignificantly affects on subsidiary profitability.

Suggested Citation

  • Wu, Wann-Yih & Lin, Ching-Yi, 2010. "Experience, environment, and subsidiary performance in high-tech MNEs," Journal of Business Research, Elsevier, vol. 63(12), pages 1301-1309, December.
    • Handle: RePEc:eee:jbrese:v:63:y:2010:i:12:p:1301-1309
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    6. Han, Xia & Liu, Xiaohui & Xia, Tianjiao & Gao, Lan, 2018. "Home-country government support, interstate relations and the subsidiary performance of emerging market multinational enterprises," Journal of Business Research, Elsevier, vol. 93(C), pages 160-172.
    7. Piotr Trapczynski, 2013. "Determinants Of Foreign Direct Investment Performance – A Critical Literature Review," Oeconomia Copernicana, Institute of Economic Research, vol. 4(2), pages 117-132, June.
    8. Sihong Wu & Di Fan & Liang Chen, 2022. "Revisiting the Internationalization-Performance Relationship: A Twenty-Year Meta-Analysis of Emerging Market Multinationals," Management International Review, Springer, vol. 62(2), pages 203-243, April.
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