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Host-country headquarters and an MNE's subsequent within-country diversifications

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  • Xufei Ma

    (Department of Management, The Chinese University of Hong Kong, New territories, Hong Kong)

  • Andrew Delios

    (Department of Business Policy, NUS Business School, National University of Singapore, Singapore)

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Abstract

We propose that the establishment of a host-country headquarters (HCHQ) in a large emerging market can be viewed as part of a multinational enterprise's (MNE) political strategy to facilitate its within-country diversifications by reducing institutional intervention of the host government. Using a sample of MNEs in China in the period 1979–2005, we find that MNEs with an HCHQ had a greater number of subsequent diversifications in China, as compared with those MNEs without an HCHQ. This effect was more prominent when the diversifications were in domains with a higher level of institutional intervention.

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Bibliographic Info

Article provided by Palgrave Macmillan in its journal Journal of International Business Studies.

Volume (Year): 41 (2010)
Issue (Month): 3 (April)
Pages: 517-525

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Handle: RePEc:pal:jintbs:v:41:y:2010:i:3:p:517-525

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