IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Wholly owned foreign subsidiary relation-based strategies in volatile environments

  • White, George O.
  • Hemphill, Thomas A.
  • Joplin, Janice R.W.
  • Marsh, Laurence A.
Registered author(s):

    Drawing from dynamic capability, institutional, nonmarket strategy, and social-network literatures, we detail wholly owned subsidiary (WOFSs) relation-based strategies (RBSs). We explain how deploying RBSs with key nonmarket and market actors will create competitive advantages for WOFSs operating in volatile emerging market environments. We posit that dynamic capabilities will drive the deployment of RBSs by WOFSs, and argue that the positive relationship between dynamic capabilities and RBS deployment will strengthen as perceived institutional uncertainty increases. We further suggest that the greater the strength and frequency of RBS deployment, the more likely that a WOFS will establish a combination of nonmarket-based and market-based embedded assets. Also, our theory proposes that greater integration of nonmarket-based and market-based assets will enhance WOFS financial performance outcomes. Implications for future research are discussed.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.sciencedirect.com/science/article/pii/S0969593113000759
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Elsevier in its journal International Business Review.

    Volume (Year): 23 (2014)
    Issue (Month): 1 ()
    Pages: 303-312

    as
    in new window

    Handle: RePEc:eee:iburev:v:23:y:2014:i:1:p:303-312
    Contact details of provider: Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/description#description

    Order Information: Postal: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/bibliographic
    Web: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/bibliographic

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. Joan Enric Ricart & Michael J Enright & Pankaj Ghemawat & Stuart L Hart & Tarun Khanna, 2004. "New frontiers in international strategy," Journal of International Business Studies, Palgrave Macmillan, vol. 35(3), pages 175-200, May.
    2. Djankov, Simeon & La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei, 2001. "The Regulation of Entry," Working Paper Series rwp01-015, Harvard University, John F. Kennedy School of Government.
    3. Li, Shaomin & Filer, Larry, 2007. "The effects of the governance environment on the choice of investment mode and the strategic implications," Journal of World Business, Elsevier, vol. 42(1), pages 80-98, March.
    4. Yadong Luo, 2005. "Transactional characteristics, institutional environment and joint venture contracts," Journal of International Business Studies, Palgrave Macmillan, vol. 36(2), pages 209-230, March.
    5. Klaus Uhlenbruck, 2004. "Developing acquired foreign subsidiaries: the experience of MNES in transition economies," Journal of International Business Studies, Palgrave Macmillan, vol. 35(2), pages 109-123, March.
    6. Luo, Yadong, 2000. "Dynamic capabilities in international expansion," Journal of World Business, Elsevier, vol. 35(4), pages 355-378, January.
    7. Garrett, Robert P. & Covin, Jeffrey G. & Slevin, Dennis P., 2009. "Market responsiveness, top management risk taking, and the role of strategic learning as determinants of market pioneering," Journal of Business Research, Elsevier, vol. 62(8), pages 782-788, August.
    8. Bonardi Jean-Philippe, 1999. "Market and Nonmarket Strategies During Deregulation: The Case of British Telecom," Business and Politics, De Gruyter, vol. 1(2), pages 203-232, August.
    9. Jain, Arvind K, 2001. " Corruption: A Review," Journal of Economic Surveys, Wiley Blackwell, vol. 15(1), pages 71-121, February.
    10. Yadong Luo, 2004. "Building a Strong Foothold in an Emerging Market: A Link Between Resource Commitment and Environment Conditions," Journal of Management Studies, Wiley Blackwell, vol. 41(5), pages 749-773, 07.
    11. Roth, Kendall & Kostova, Tatiana, 2003. "Organizational coping with institutional upheaval in transition economies," Journal of World Business, Elsevier, vol. 38(4), pages 314-330, November.
    12. Li, Shaomin, 2005. "Why a poor governance environment does not deter foreign direct investment: The case of China and its implications for investment protection," Business Horizons, Elsevier, vol. 48(4), pages 297-302.
    13. David A Griffith & Michael G Harvey, 2001. "A Resource Perspective of Global Dynamic Capabilities," Journal of International Business Studies, Palgrave Macmillan, vol. 32(3), pages 597-606, September.
    14. Mudambi, Ram & Navarra, Pietro, 2002. "Institutions and internation business: a theoretical overview," International Business Review, Elsevier, vol. 11(6), pages 635-646, December.
    15. Klaus Uhlenbruck & Klaus E. Meyer & Michael A. Hitt, 2003. "Organizational Transformation in Transition Economies: Resource-based and Organizational Learning Perspectives," Journal of Management Studies, Wiley Blackwell, vol. 40(2), pages 257-282, 03.
    16. Danny Miller & Jangwoo Lee & Sooduck Chang & Isabelle Le Breton-Miller, 2009. "Filling the institutional void: The social behavior and performance of family vs non-family technology firms in emerging markets," Journal of International Business Studies, Palgrave Macmillan, vol. 40(5), pages 802-817, June.
    17. Chris Changwha Chung, 2005. "The Impact of Institutional Reforms on Characteristics and Survival of Foreign Subsidiaries in Emerging Economies," Journal of Management Studies, Wiley Blackwell, vol. 42(1), pages 35-62, 01.
    18. Donald J Lecraw, 1983. "Performance of Transnational Corporations in Less Developed Countries," Journal of International Business Studies, Palgrave Macmillan, vol. 14(1), pages 15-33, March.
    19. Yadong Luo, 1999. "Time-based Experience and International Expansion: The Case of an Emerging Economy," Journal of Management Studies, Wiley Blackwell, vol. 36(4), pages 505-534, 07.
    20. Danis, Wade M. & De Clercq, Dirk & Petricevic, Olga, 2011. "Are social networks more important for new business activity in emerging than developed economies? An empirical extension," International Business Review, Elsevier, vol. 20(4), pages 394-408, August.
    21. Ted London & Stuart L Hart, 2004. "Reinventing strategies for emerging markets: beyond the transnational model," Journal of International Business Studies, Palgrave Macmillan, vol. 35(5), pages 350-370, September.
    22. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2008. "Governance matters VII : aggregate and individual governance indicators 1996-2007," Policy Research Working Paper Series 4654, The World Bank.
    23. Xie, Yu Henry & Zhao, Hongxin John & Xie, Qian Jane & Arnold, Mark, 2011. "On the determinants of post-entry strategic positioning of foreign firms in a host market: A "strategy tripod" perspective," International Business Review, Elsevier, vol. 20(4), pages 477-490, August.
    24. Bonardi, Jean-Philippe & Holburn, Guy & Vanden Bergh, Rick, 2006. "Nonmarket performance: Evidence from U.S. electric utilities," MPRA Paper 14437, University Library of Munich, Germany.
    25. Yadong Luo, 2001. "Determinants of Entry in an Emerging Economy: A Multilevel Approach," Journal of Management Studies, Wiley Blackwell, vol. 38(3), pages 443-472, 05.
    26. Yadong Luo & Mike W Peng, 1999. "Learning to Compete in a Transition Economy: Experience, Environment, and Performance," Journal of International Business Studies, Palgrave Macmillan, vol. 30(2), pages 269-295, June.
    27. Shige Makino & Chung-Ming Lau & Rhy-Song Yeh, 2002. "Asset-Exploitation Versus Asset-Seeking: Implications for Location Choice of Foreign Direct Investment from Newly Industrialized Economies," Journal of International Business Studies, Palgrave Macmillan, vol. 33(3), pages 403-421, September.
    28. Mike Peng & Jessie Zhou, 2005. "How Network Strategies and Institutional Transitions Evolve in Asia," Asia Pacific Journal of Management, Springer, vol. 22(4), pages 321-336, December.
    29. Farok J Contractor, 1990. "Ownership Patterns of U.S. Joint Ventures Abroad and the Liberalization of Foreign Government Regulations in the 1980s: Evidence from the Benchmark Surveys," Journal of International Business Studies, Palgrave Macmillan, vol. 21(1), pages 55-73, March.
    30. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
    31. Mara Faccio, 2006. "Politically Connected Firms," American Economic Review, American Economic Association, vol. 96(1), pages 369-386, March.
    32. Bevan, Alan & Estrin, Saul & Meyer, Klaus, 2004. "Foreign investment location and institutional development in transition economies," International Business Review, Elsevier, vol. 13(1), pages 43-64, February.
    33. Thomas L Brewer, 1993. "Government Policies, Market Imperfections, and Foreign Direct Investment," Journal of International Business Studies, Palgrave Macmillan, vol. 24(1), pages 101-120, March.
    34. Mark Granovetter, 2005. "The Impact of Social Structure on Economic Outcomes," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 33-50, Winter.
    35. Anoop Madhok & Thomas Osegowitsch, 2000. "The International Biotechnology Industry: A Dynamic Capabilities Perspective," Journal of International Business Studies, Palgrave Macmillan, vol. 31(2), pages 325-335, June.
    36. Baron David P., 1999. "Integrated Market and Nonmarket Strategies in Client and Interest Group Politics," Business and Politics, De Gruyter, vol. 1(1), pages 7-34, December.
    37. Bryan W Husted, 1999. "Wealth, Culture, and Corruption," Journal of International Business Studies, Palgrave Macmillan, vol. 30(2), pages 339-359, June.
    38. MacIntyre, Andrew, 2001. "Institutions and Investors: The Politics of the Economic Crisis in Southeast Asia," International Organization, Cambridge University Press, vol. 55(01), pages 81-122, December.
    39. Klaus E Meyer, 2001. "Institutions, Transaction Costs, and Entry Mode Choice in Eastern Europe," Journal of International Business Studies, Palgrave Macmillan, vol. 32(2), pages 357-367, June.
    40. Keim, Gerald D. & Hillman, Amy J., 2008. "Political environments and business strategy: Implications for managers," Business Horizons, Elsevier, vol. 51(1), pages 47-53.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:eee:iburev:v:23:y:2014:i:1:p:303-312. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.