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Localization, Globalization and Networks of foreign Subsidiaries

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  • Filip De Beule
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    Abstract

    This research is about multinational enterprises (MNEs) and their subsidiaries abroad. The specific focus of the research is on the foreign subsidiaries? local embeddedness, global integration and multinational networks. As these linkages vary among subsidiaries and across time, the focal interest of this study is the processes of subsidiary strategic evolution. On the basis of a longitudinal survey of subsidiaries in China, the results show that most subsidiaries in China start as a quiescent-type of firm, which is clearly a stepping stone towards other more strategic roles as quiescent subsidiaries move out of this category towards autonomoustype or confederate-type firms and eventually active-type subsidiaries. The most prevalent trajectory of strategic evolution by multinational subsidiaries in China is by increasing the liaisons in the multinational network before gaining more local embeddedness towards a more globally active role for the foreign subsidiary. This is in contrast to previous research which found strategic evolution towards the quiescent-type firm in more developed economies. It is suggested that this contradictory result is linked to the emerging economy status of China, which still allows for much strategic progress to be made by foreign affiliates. URL:[http://fgks.in/IndexServer/tifac/article/148.pdf]

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    Bibliographic Info

    Paper provided by eSocialSciences in its series Working Papers with number id:4500.

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    Date of creation: Oct 2011
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    Handle: RePEc:ess:wpaper:id:4500

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    Related research

    Keywords: market orientation and size; labor skills; technical capabilities; supplier networks; technology; vehicles; transfer of technology; competitive attributes; goods; economies; multinational subsidiaries; horizontal organization; MNE; China; Canada; Scotland;

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    1. Jon I Martinez & J Carlos Jarillo, 1991. "Coordination Demands of International Strategies," Journal of International Business Studies, Palgrave Macmillan, vol. 22(3), pages 429-444, September.
    2. Dimitratos, Pavlos & Liouka, Ioanna & Young, Stephen, 2009. "Regional location of multinational corporation subsidiaries and economic development contribution: Evidence from the UK," Journal of World Business, Elsevier, vol. 44(2), pages 180-191, April.
    3. Thomas W Malnight, 1996. "The Transition from Decentralized to Network-Based MNC Structures: An Evolutionary Perspective," Journal of International Business Studies, Palgrave Macmillan, vol. 27(1), pages 43-65, March.
    4. J R Firn, 1975. "External control and regional development: the case of Scotland," Environment and Planning A, Pion Ltd, London, vol. 7(4), pages 393-414, April.
    5. Kendall Roth & Allen J Morrison, 1992. "Implementing Global Strategy: Characteristics of Global Subsidiary Mandates," Journal of International Business Studies, Palgrave Macmillan, vol. 23(4), pages 715-735, December.
    6. Julius H Johnson, 1995. "An Empirical Analysis of the Integration-Responsiveness Framework: U.S. Construction Equipment Industry Firms in Global Competition," Journal of International Business Studies, Palgrave Macmillan, vol. 26(3), pages 621-635, September.
    7. Kendall Roth & Allen J Morrison, 1990. "An Empirical Analysis of the Integration-Responsiveness Framework in Global Industries," Journal of International Business Studies, Palgrave Macmillan, vol. 21(4), pages 541-564, December.
    8. Julian Birkinshaw, 1996. "How Multinational Subsidiary Mandates are Gained and Lost," Journal of International Business Studies, Palgrave Macmillan, vol. 27(3), pages 467-495, September.
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