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Inter-firm alliance and network relationships and the eclectic paradigm of international production: an exploratory analysis of quasi-internalisation at the subsidiary level

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  • Scott-Kennel, Joanna
  • Enderwick, Peter

Abstract

At a conceptual level, the eclectic paradigm of international production has evolved in response to the growth of inter-firm alliances and networks. Yet, there is little empirical research on the nature, extent and compatibility of external network relationships formed at the subsidiary level to support this development. We propose that these relationships may be incorporated into the eclectic paradigm by measuring the extent of quasi-internalisation (transfer) of firm-specific advantages and resources between the subsidiary and local customers, suppliers, and alliance partners. Two distinctive features of this paper are observation of quasi-internalisation via subsidiary-network relationships, and exploration of the complementarity of quasi-internalisation with FDI. The study is based on data concerning 516 foreign subsidiaries headquartered in New Zealand. Our results indicate that quasi-internalisation of resources occurs via external network relationships, and complements FDI by allowing the subsidiary to become an organiser of both internal and external resources.

Suggested Citation

  • Scott-Kennel, Joanna & Enderwick, Peter, 2004. "Inter-firm alliance and network relationships and the eclectic paradigm of international production: an exploratory analysis of quasi-internalisation at the subsidiary level," International Business Review, Elsevier, vol. 13(4), pages 425-445, August.
  • Handle: RePEc:eee:iburev:v:13:y:2004:i:4:p:425-445
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    References listed on IDEAS

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    Cited by:

    1. Giroud, Axèle & Scott-Kennel, Joanna, 2009. "MNE linkages in international business: A framework for analysis," International Business Review, Elsevier, vol. 18(6), pages 555-566, December.
    2. Scott-Kennel, Joanna & Giroud, Axele, 2015. "MNEs and FSAs: Network knowledge, strategic orientation and performance," Journal of World Business, Elsevier, vol. 50(1), pages 94-107.
    3. Han, I & Liang, Hsin-Yu & Chan, Kam C., 2016. "Locational concentration and institutional diversification: Evidence from foreign direct investments in the banking industry," The North American Journal of Economics and Finance, Elsevier, vol. 38(C), pages 185-199.
    4. Santangelo, Grazia Domenica, 2012. "The tension of information sharing: Effects on subsidiary embeddedness," International Business Review, Elsevier, vol. 21(2), pages 180-195.
    5. Anwar, Sajid & Nguyen, Lan Phi, 2011. "Foreign direct investment and export spillovers: Evidence from Vietnam," International Business Review, Elsevier, vol. 20(2), pages 177-193, April.
    6. Jindra, Björn & Giroud, Axèle & Scott-Kennel, Joanna, 2009. "Subsidiary roles, vertical linkages and economic development: Lessons from transition economies," Journal of World Business, Elsevier, vol. 44(2), pages 167-179, April.
    7. repec:spr:manint:v:47:y:2007:i:1:d:10.1007_s11575-007-0004-6 is not listed on IDEAS
    8. Perri, Alessandra & Andersson, Ulf & Nell, Phillip C. & Santangelo, Grazia D., 2013. "Balancing the trade-off between learning prospects and spillover risks: MNC subsidiaries’ vertical linkage patterns in developed countries," Journal of World Business, Elsevier, vol. 48(4), pages 503-514.
    9. Pease, Stephanie & Paliwoda, Stanley & Slater, Jim, 2006. "The erosion of stable shareholder practice in Japan ("Anteikabunushi Kosaku")," International Business Review, Elsevier, vol. 15(6), pages 618-640, December.

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