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Survival of the foreign subsidiaries of TMNCs: The influence of business group affiliation

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  • Garg, Miti
  • Delios, Andrew

Abstract

We investigate the survival rates of the foreign subsidiaries of multinational firms from India to test if affiliation to a business group affects a subsidiary's survival chances. Business group affiliation is an important organizational attribute of firms in emerging economies. Business groups are complex organizations with heterogeneous resources that evolve along with changes in the institutional environment of a firm's home country. We examine how business group affiliation and the development stage of the host country jointly influence the survival chances of foreign subsidiaries. Our results show that business group affiliation does not have an independent influence on a subsidiary's survival rates, but it does have a contingent effect, where the contingency emerges from the development stage of the host country. Our findings thus have implications for the theory of TMNCs, and business group strategy in emerging economies.

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  • Garg, Miti & Delios, Andrew, 2007. "Survival of the foreign subsidiaries of TMNCs: The influence of business group affiliation," Journal of International Management, Elsevier, vol. 13(3), pages 278-295, September.
  • Handle: RePEc:eee:intman:v:13:y:2007:i:3:p:278-295
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    Cited by:

    1. Becker-Ritterspach, Florian & Bruche, Gert, 2012. "Capability creation and internationalization with business group embeddedness – the case of Tata Motors in passenger cars," European Management Journal, Elsevier, pages 232-247.
    2. Denk, Nikola & Kaufmann, Lutz & Roesch, Jan-Frederik, 2012. "Liabilities of Foreignness Revisited: A Review of Contemporary Studies and Recommendations for Future Research," Journal of International Management, Elsevier, pages 322-334.
    3. Michael Young & Terence Tsai & Xinran Wang & Shubo Liu & David Ahlstrom, 2014. "Strategy in emerging economies and the theory of the firm," Asia Pacific Journal of Management, Springer, pages 331-354.
    4. Somnath Lahiri, 2011. "India-focused publications in leading international business journals," Asia Pacific Journal of Management, Springer, pages 427-447.
    5. repec:spr:manint:v:57:y:2017:i:3:d:10.1007_s11575-016-0287-6 is not listed on IDEAS
    6. Song, Sangcheol, 2014. "Unfavorable Market Conditions, Institutional and Financial Development, and Exits of Foreign Subsidiaries," Journal of International Management, Elsevier, pages 279-289.
    7. Alcantara, Lailani Laynesa & Mitsuhashi, Hitoshi, 2012. "Make-or-Break Decisions in Choosing Foreign Direct Investment Locations," Journal of International Management, Elsevier, pages 335-351.
    8. Buckley, Peter J. & Elia, Stefano & Kafouros, Mario, 2014. "Acquisitions by emerging market multinationals: Implications for firm performance," Journal of World Business, Elsevier, pages 611-632.
    9. Tolentino, Paz Estrella, 2010. "Home country macroeconomic factors and outward FDI of China and India," Journal of International Management, Elsevier, vol. 16(2), pages 102-120, June.
    10. Tolentino, Paz Estrella, 2008. "The determinants of the outward foreign direct investment of China and India: Whither the home country?," MERIT Working Papers 049, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    11. Fortanier, Fabienne & Tulder, Rob van, 2008. "Internationalization trajectories - a crosscountry comparison: Are large Chinese and Indian companies different?," MERIT Working Papers 054, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    12. Demirbag, Mehmet & McGuinness, Martina & Akin, Ahmet & Bayyurt, Nizamettin & Basti, Eyup, 2016. "The professional service firm (PSF) in a globalised economy: A study of the efficiency of securities firms in an emerging market," International Business Review, Elsevier, pages 1089-1102.

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