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What Determined Success During the Asian Economic Crisis?—The Importance of Experiential Knowledge and Group Affiliation

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  • Hui-mei Wang

    ()

  • Hengchiang Huang

    ()

  • Pratima Bansal

    ()

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    Abstract

    This study investigated the factors that determined the change in firm performance during the Asian economic crisis. Applying a process-oriented resource-based view and MNC network theory, we argued that host country experience, industry experience, subsidiary experience, and group affiliation would influence subsidiary performance during an economic crisis. By testing the hypotheses on a sample of 1128 Japanese subsidiaries in Thailand, Indonesia, Malaysia, and Korea, we found that, among different knowledge resources that the MNC accumulated in its internationalization process, subsidiary experiential knowledge was most significant in picking the winners from the losers during the crisis. Keiretsu affiliation and the parent firm’s industry experience were also significant, positive factors for firms remaining profitable or even better after the crisis. However, firm size and industry effects were not related to performance. Copyright Springer Science + Business Media, Inc. 2005

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    File URL: http://hdl.handle.net/10.1007/s10490-005-6419-3
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    Bibliographic Info

    Article provided by Springer in its journal Asia Pacific Journal of Management.

    Volume (Year): 22 (2005)
    Issue (Month): 1 (January)
    Pages: 89-106

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    Handle: RePEc:kap:asiapa:v:22:y:2005:i:1:p:89-106

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    Postal: P.O. Box 17, 3300 AA Dordrecht, the Netherlands
    Web page: http://www.springerlink.com/link.asp?id=106589

    Related research

    Keywords: knowledge resource; keiretsu; Asian economic crisis; MNC;

    References

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    1. Jean-François Hennart, 1991. "The Transaction Costs Theory of Joint Ventures: An Empirical Study of Japanese Subsidiaries in the United States," Management Science, INFORMS, INFORMS, vol. 37(4), pages 483-497, April.
    2. Bruce Kogut & Udo Zander, 1993. "Knowledge of the Firm and the Evolutionary Theory of the Multinational Corporation," Journal of International Business Studies, Palgrave Macmillan, vol. 24(4), pages 625-645, December.
    3. Shige Makino & Andrew Delios, 1996. "Local Knowledge Transfer and Performance: Implications for Alliance Formation in Asia," Journal of International Business Studies, Palgrave Macmillan, vol. 27(5), pages 905-927, December.
    4. John H Dunning, 1988. "The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions," Journal of International Business Studies, Palgrave Macmillan, vol. 19(1), pages 1-31, March.
    5. Narula, Rajneesh, 2002. "Innovation systems and 'inertia' in R&D location: Norwegian firms and the role of systemic lock-in," Research Policy, Elsevier, vol. 31(5), pages 795-816, July.
    6. Shige Makino & Andrew Delios, 1996. "Local Knowledge Transfer and Performance: Implications for Alliance Formation in Asia," Journal of International Business Studies, Palgrave Macmillan, vol. 27(4), pages 905-927, December.
    7. David Teece, 1977. "Time-Cost Tradeoffs: Elasticity Estimates and Determinants for International Technology Transfer Projects," Management Science, INFORMS, INFORMS, vol. 23(8), pages 830-837, April.
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    Cited by:
    1. Anna Maria Ferragina & Fernanda Mazzotta & Erol Taymaz & Kamil Yilmaz, 2013. "The Impact Of Fdi On Firm Survival And Employment: A Comparative Analysis For Turkey And Italy," ERSA conference papers ersa13p1211, European Regional Science Association.
    2. Takehiko Isobe & Shige Makino & Anthony Goerzen, 2006. "Japanese Horizontal Keiretsu and the Performance Implications of Membership," Discussion Paper Series, Research Institute for Economics & Business Administration, Kobe University 190, Research Institute for Economics & Business Administration, Kobe University.
    3. Varum, Celeste Amorim & Rocha, Vera Catarina Barros, 2011. "Do foreign and domestic firms behave any different during economic slowdowns?," International Business Review, Elsevier, vol. 20(1), pages 48-59, February.

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