IDEAS home Printed from https://ideas.repec.org/a/eee/worbus/v49y2014i1p51-62.html
   My bibliography  Save this article

MNC subsidiary size and expatriate control: Resource-dependence and learning perspectives

Author

Listed:
  • Peng, George Z.
  • Beamish, Paul W.

Abstract

Based on resource-dependence theory, we hypothesize a U-shaped relationship between multinational corporations’ subsidiary size and expatriate staffing level. Drawing on both resource-dependence and learning perspectives, the U-shaped relationship is further hypothesized to be moderated by parent-firm size, the amount of equity ownership of the parent firm in the subsidiary, and subsidiary age. A sample of 11,754 Japanese overseas subsidiaries was used to test the hypotheses. Results supported all four hypotheses both cross-sectionally and longitudinally, and explained 24% of the variance in expatriate staffing level. The theoretical and practical implications of these findings are discussed.

Suggested Citation

  • Peng, George Z. & Beamish, Paul W., 2014. "MNC subsidiary size and expatriate control: Resource-dependence and learning perspectives," Journal of World Business, Elsevier, vol. 49(1), pages 51-62.
    • Handle: RePEc:eee:worbus:v:49:y:2014:i:1:p:51-62
    DOI: 10.1016/j.jwb.2012.11.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1090951612001228
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jwb.2012.11.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Butler, Richard & Sohod, Salmi, 1995. "Joint-venture autonomy: Resource dependence and transaction costs perspectives," Scandinavian Journal of Management, Elsevier, vol. 11(2), pages 159-175, June.
    2. Mats Forsgren & Ulf Holm & Jan Johanson, 2005. "Managing the Embedded Multinational," Books, Edward Elgar Publishing, number 4000.
    3. Taggart, James & Hood, Neil, 1999. "Determinants of autonomy in multinational corporation subsidiaries," European Management Journal, Elsevier, vol. 17(2), pages 226-236, April.
    4. Benito, Gabriel R.G. & Tomassen, Sverre & Bonache-Pérez, Jaime & Pla-Barber, José, 2005. "A transaction cost analysis of staffing decisions in international operations," Scandinavian Journal of Management, Elsevier, vol. 21(1), pages 101-126, March.
    5. Zhang, Yan & Li, Haiyang, 2001. "The control design and performance in international joint ventures: a dynamic evolution perspective," International Business Review, Elsevier, vol. 10(3), pages 341-362, June.
    6. David M Brock & Oded Shenkar & Amir Shoham & Ilene C Siscovick, 2008. "National culture and expatriate deployment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(8), pages 1293-1309, December.
    7. 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, July.
    8. Stewart Johnston & Bulent Menguc, 2007. "Subsidiary size and the level of subsidiary autonomy in multinational corporations: a quadratic model investigation of Australian subsidiaries," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(5), pages 787-801, September.
    9. René A Belderbos & Mariëlle G Heijltjes, 2005. "The determinants of expatriate staffing by Japanese multinationals in Asia: control, learning and vertical business groups," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 36(3), pages 341-354, May.
    10. Donald J Lecraw, 1984. "Bargaining Power, Ownership, and Profitability of Transnational Corporations in Developing Countries," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 15(1), pages 27-43, March.
    11. Alfred M Jaeger, 1983. "The Transfer of Organizational Culture Overseas: An Approach to Control in the Multinational Corporation," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 14(2), pages 91-113, June.
    12. Shih-Fen S Chen & Jean-Francois Hennart, 2002. "Japanese Investors' Choice of Joint Ventures Versus Wholly-owned Subsidiaries in the US: The Role of Market Barriers and Firm Capabilities," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(1), pages 1-18, March.
    13. Bruce Kogut & Harbir Singh, 1988. "The Effect of National Culture on the Choice of Entry Mode," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 19(3), pages 411-432, September.
    14. Danchi Tan & J. T. Mahoney, 2006. "Why a Multinational Firm Chooses Expatriates: Integrating Resource‐Based, Agency and Transaction Costs Perspectives," Journal of Management Studies, Wiley Blackwell, vol. 43(3), pages 457-484, May.
    15. Anoop Madhok, 1997. "Cost, Value And Foreign Market Entry Mode: The Transaction And The Firm," Strategic Management Journal, Wiley Blackwell, vol. 18(1), pages 39-61, January.
    16. Aharoni, Yair & Tihanyi, Laszlo & Connelly, Brian L., 2011. "Managerial decision-making in international business: A forty-five-year retrospective," Journal of World Business, Elsevier, vol. 46(2), pages 135-142, April.
    17. Stewart Johnston, 2005. "Headquarters and Subsidiaries in Multinational Corporations," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-51100-2, December.
    18. Paterson, S. L. & Brock, D. M., 2002. "The development of subsidiary-management research: review and theoretical analysis," International Business Review, Elsevier, vol. 11(2), pages 139-163, April.
    19. James H Taggart, 1997. "Autonomy and Procedural Justice: A Framework for Evaluating Subsidiary Strategy," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 28(1), pages 51-76, March.
    20. Linda Longfellow Blodgett, 1991. "Partner Contributions as Predictors of Equity Share in International Joint Ventures," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 22(1), pages 63-78, March.
    21. Wilkinson, Timothy J. & Peng, George Z. & Brouthers, Lance Eliot & Beamish, Paul W., 2008. "The diminishing effect of cultural distance on subsidiary control," Journal of International Management, Elsevier, vol. 14(2), pages 93-107, June.
    22. Ram Mudambi & Pietro Navarra, 2004. "Is knowledge power? Knowledge flows, subsidiary power and rent-seeking within MNCs," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(5), pages 385-406, September.
    23. Peng, George Z., 2012. "FDI legitimacy and MNC subsidiary control: From legitimation to competition," Journal of International Management, Elsevier, vol. 18(2), pages 115-131.
    24. George Z. Peng & Paul W. Beamish, 2007. "Evolving FDI Legitimacy and Strategic Choice of Japanese Subsidiaries in China," Management and Organization Review, The International Association for Chinese Management Research, vol. 3(3), pages 373-396, November.
    25. Aimin Yan & Barbara Gray, 2001. "Antecedents and Effects of Parent Control in International Joint Ventures," Journal of Management Studies, Wiley Blackwell, vol. 38(3), pages 393-416, May.
    26. Shih-Fen S Chen, 2008. "The motives for international acquisitions: capability procurements, strategic considerations, and the role of ownership structures," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(3), pages 454-471, April.
    27. Nakiye Boyacigiller, 1990. "The Role of Expatriates in the Management of Interdependence Complexity and Risk in Multinational Corporations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 21(3), pages 357-381, September.
    28. Lee, Ji-Ren & Chen, Wei-Ru & Kao, Charng, 1998. "Bargaining power and the trade-off between the ownership and control of international joint ventures in China," Journal of International Management, Elsevier, vol. 4(4), pages 353-385, December.
    29. Peng, George Z. & Beamish, Paul W., 2007. "Evolving FDI Legitimacy and Strategic Choice of Japanese Subsidiaries in China," Management and Organization Review, Cambridge University Press, vol. 3(3), pages 373-396, November.
    30. William G Egelhoff, 1984. "Patterns of Control in U.S., UK and European Multinational Corporations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 15(2), pages 73-83, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lipeng Gary Ge & Cuili Qian & Jiatao Li, 2019. "Mimicry, Knowledge Spillover and Expatriate Assignment Strategy in Overseas Subsidiaries," Management International Review, Springer, vol. 59(6), pages 981-1007, December.
    2. Jean-Pascal Bassino & Marion Dovis & Pierre van der Eng, 2015. "Do Japanese MNCs use expatriates to contain risk in Asian host countries?," Asia Pacific Business Review, Taylor & Francis Journals, vol. 21(3), pages 383-402, July.
    3. Nayab Zahra & Danish Ahmed Siddiqui, 2020. "Can Parents be attributed for their Subsidiary Performance?: A Multi-Level Analysis for Performance Determinants of Multinational Enterprises in Pakistan," International Journal of Regional Development, Macrothink Institute, vol. 7(2), pages 1-38, December.
    4. Tianjiao Xia & Xiaohui Liu, 2017. "Foreign competition, domestic competition and innovation in Chinese private high-tech new ventures," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(6), pages 716-739, August.
    5. Moreira, Márcia Zabdiele & Ogasavara, Mário Henrique, 2018. "Formal and informal institutions and the expatriation assignment: The case of Japanese subsidiaries in Latin America," Japan and the World Economy, Elsevier, vol. 47(C), pages 18-26.
    6. Peng, George Z. & Beamish, Paul W., 2019. "Subnational FDI Legitimacy and Foreign Subsidiary Survival," Journal of International Management, Elsevier, vol. 25(3), pages 1-1.
    7. Nan Zhou & Heli Wang, 2020. "Foreign subsidiary CSR as a buffer against parent firm reputation risk," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(8), pages 1256-1282, October.
    8. Hemin Song & Shuai Zhao & Wenwen Zhao & Hua Han, 2019. "Career Development Support, Job Adaptation, and Withdrawal Intention of Expatriates: A Multilevel Analysis of Environmental Factors," IJERPH, MDPI, vol. 16(20), pages 1-15, October.
    9. Vlajčić, Davor & Caputo, Andrea & Marzi, Giacomo & Dabić, Marina, 2019. "Expatriates managers’ cultural intelligence as promoter of knowledge transfer in multinational companies," Journal of Business Research, Elsevier, vol. 94(C), pages 367-377.
    10. Farah, Bassam & Chakravarty, Dwarka & Dau, Luis & Beamish, Paul W., 2022. "Multinational enterprise parent-subsidiary governance and survival," Journal of World Business, Elsevier, vol. 57(2).
    11. Arte, Pratik & Larimo, Jorma, 2019. "Taking stock of foreign divestment: Insights and recommendations from three decades of contemporary literature," International Business Review, Elsevier, vol. 28(6), pages 1-1.
    12. Ramsin Yakob, 2020. "Context, competencies, and local managerial capacity development: a longitudinal study of HRM implementation at Volvo Car China," Asian Business & Management, Palgrave Macmillan, vol. 19(5), pages 582-609, November.
    13. Ramsin Yakob, 0. "Context, competencies, and local managerial capacity development: a longitudinal study of HRM implementation at Volvo Car China," Asian Business & Management, Palgrave Macmillan, vol. 0, pages 1-28.
    14. Felix Reimann & Johan Rauer & Lutz Kaufmann, 2015. "MNE Subsidiaries’ Strategic Commitment to CSR in Emerging Economies: The Role of Administrative Distance, Subsidiary Size, and Experience in the Host Country," Journal of Business Ethics, Springer, vol. 132(4), pages 845-857, December.
    15. Dahms, Sven, 2019. "Foreign-owned subsidiary knowledge sourcing: The role of location and expatriates," Journal of Business Research, Elsevier, vol. 105(C), pages 178-188.
    16. Nicola D. Coniglio & Rezart Hoxhaj & Adnan Seric, 2017. "The demand for foreign workers by foreign firms: evidence from Africa," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(2), pages 353-384, May.
    17. Beamish, Paul W. & Lupton, Nathaniel C., 2016. "Cooperative strategies in international business and management: Reflections on the past 50 years and future directions," Journal of World Business, Elsevier, vol. 51(1), pages 163-175.
    18. Bussy, Adrien & Zheng, Huanhuan, 2023. "Responses of FDI to geopolitical risks: The role of governance, information, and technology," International Business Review, Elsevier, vol. 32(4).
    19. Nan Zhou & Heli Wang, 0. "Foreign subsidiary CSR as a buffer against parent firm reputation risk," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 0, pages 1-27.
    20. Jong Min Lee, 2022. "MNCs as dispersed structures of power: Performance and management implications of power distribution in the subsidiary portfolio," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(1), pages 126-155, February.
    21. Lee, Jong Min, 2019. "Intra- and inter-regional diversification, subsidiary value chain activities and expatriate utilization," Journal of International Management, Elsevier, vol. 25(3), pages 1-1.
    22. Pla-Barber, José & Botella-Andreu, Ana & Villar, Cristina, 2021. "Intermediate units in multinational corporations: A resource dependency view on coordinative versus entrepreneurial roles," International Business Review, Elsevier, vol. 30(1).
    23. Liu, Xiaohui & Gao, Lan & Lu, Jiangyong & Lioliou, Eleni, 2016. "Environmental risks, localization and the overseas subsidiary performance of MNEs from an emerging economy," Journal of World Business, Elsevier, vol. 51(3), pages 356-368.
    24. Jiang, Guoliang F. & Holburn, Guy L.F. & Beamish, Paul W., 2016. "The spatial structure of foreign subsidiaries and MNE expansion strategy," Journal of World Business, Elsevier, vol. 51(3), pages 438-450.
    25. Chatzopoulou, Erifili-Christina & Dimitratos, Pavlos & Lioukas, Spyros, 2021. "Agency controls and subsidiary strategic initiatives: The mediating role of subsidiary autonomy," International Business Review, Elsevier, vol. 30(3).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Peng, George Z., 2012. "FDI legitimacy and MNC subsidiary control: From legitimation to competition," Journal of International Management, Elsevier, vol. 18(2), pages 115-131.
    2. Jong Min Lee, 2022. "MNCs as dispersed structures of power: Performance and management implications of power distribution in the subsidiary portfolio," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(1), pages 126-155, February.
    3. Kawai, Norifumi & Strange, Roger, 2014. "Subsidiary autonomy and performance in Japanese multinationals in Europe," International Business Review, Elsevier, vol. 23(3), pages 504-515.
    4. George Peng & Paul Beamish, 2014. "The effect of host country long term orientation on subsidiary ownership and survival," Asia Pacific Journal of Management, Springer, vol. 31(2), pages 423-453, June.
    5. de Jong, Gjalt & van Dut, Vo & Jindra, Björn & Marek, Philipp, 2015. "Does country context distance determine subsidiary decision-making autonomy? Theory and evidence from European transition economies," International Business Review, Elsevier, vol. 24(5), pages 874-889.
    6. Lee, Jong Min, 2019. "Intra- and inter-regional diversification, subsidiary value chain activities and expatriate utilization," Journal of International Management, Elsevier, vol. 25(3), pages 1-1.
    7. Lipeng Gary Ge & Cuili Qian & Jiatao Li, 2019. "Mimicry, Knowledge Spillover and Expatriate Assignment Strategy in Overseas Subsidiaries," Management International Review, Springer, vol. 59(6), pages 981-1007, December.
    8. Rickley, Marketa & Karim, Samina, 2018. "Managing institutional distance: Examining how firm-specific advantages impact foreign subsidiary CEO staffing," Journal of World Business, Elsevier, vol. 53(5), pages 740-751.
    9. Jonas Puck & Markus K. Hödl & Igor Filatotchev & Hans-Georg Wolff & Benjamin Bader, 2016. "Ownership mode, cultural distance, and the extent of parent firms’ strategic control over subsidiaries in the PRC," Asia Pacific Journal of Management, Springer, vol. 33(4), pages 1075-1105, December.
    10. Lee, Ji-Ren & Chen, Wei-Ru & Kao, Charng, 2003. "Determinants and performance impact of asymmetric governance structures in international joint ventures: an empirical investigation," Journal of Business Research, Elsevier, vol. 56(10), pages 815-828, October.
    11. Rabbiosi, Larissa, 2011. "Subsidiary roles and reverse knowledge transfer: An investigation of the effects of coordination mechanisms," Journal of International Management, Elsevier, vol. 17(2), pages 97-113, June.
    12. Hendrik Klier & Christian Schwens & Florian B. Zapkau & Desislava Dikova, 2017. "Which Resources Matter How and Where? A Meta-Analysis on Firms’ Foreign Establishment Mode Choice," Journal of Management Studies, Wiley Blackwell, vol. 54(3), pages 304-339, May.
    13. Sarabi, Almasa & Froese, Fabian J. & Chng, Daniel H.M. & Meyer, Klaus E., 2020. "Entrepreneurial leadership and MNE subsidiary performance: The moderating role of subsidiary context," International Business Review, Elsevier, vol. 29(3).
    14. Paik, Yongsun & Sohn, Junghoon Derick, 2004. "Expatriate managers and MNC's ability to control international subsidiaries: the case of Japanese MNCs," Journal of World Business, Elsevier, vol. 39(1), pages 61-71, February.
    15. Yang, Jing Yu & Wen, Liang & Volk, Stefan & Lu, Jane Wenzhen, 2022. "Temporal boundaries and expatriate staffing: Effects of parent–subsidiary work-time overlap," Journal of World Business, Elsevier, vol. 57(6).
    16. Yulin Fang & Guo‐Liang Frank Jiang & Shige Makino & Paul W. Beamish, 2010. "Multinational Firm Knowledge, Use of Expatriates, and Foreign Subsidiary Performance," Journal of Management Studies, Wiley Blackwell, vol. 47(1), pages 27-54, January.
    17. Farah, Bassam & Chakravarty, Dwarka & Dau, Luis & Beamish, Paul W., 2022. "Multinational enterprise parent-subsidiary governance and survival," Journal of World Business, Elsevier, vol. 57(2).
    18. Mehmet Demirbag & Ekrem Tatoglu & Keith W. Glaister, 2008. "Factors affecting perceptions of the choice between acquisition and greenfield entry: The case of Western FDI in an emerging market," Management International Review, Springer, vol. 48(1), pages 5-38, February.
    19. Chiao, Yu-Ching & Ying, Kung-Pao, 2013. "Network effect and subsidiary autonomy in multinational corporations: An investigation of Taiwanese subsidiaries," International Business Review, Elsevier, vol. 22(4), pages 652-662.
    20. Chun-Chien Lin & Yu-Ching Chiao & Tung-Lung Chang & Yu-Chen Chang, 2023. "The determinants of the use of process control mechanisms in FDI decisions in headquarters–subsidiary relationships," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-14, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:worbus:v:49:y:2014:i:1:p:51-62. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/620401/description#description .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.