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Autonomy and Performance of Foreign Subsidiaries in five Transition Countries

  • Urmas Varblane

    ()

  • Katrin Männik

    ()

  • Helena Hannula

    ()

The paper analyses the link between the autonomy according to business function and the performance of foreign subsidiaries in Slovenia, Poland, Hungary, Slovakia and Estonia. The novelty of the paper is in the deeper investigation of the multidimensionality of autonomy. Using the method of principal components, four business function factors relating to autonomy were obtained (technology, marketing, management, finance). The results supported the argument that the relationship between autonomy and performance depends on the type of autonomy. Marketing and finance are the most powerful dimensions of autonomy. Higher autonomy in marketing is negatively linked with technology upgrading, measured by productivity level, improvement of technological level of production equipment, and quality of products. The higher the financial autonomy of the subsidiaries the bigger the positive changes in all fields of performance.

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File URL: http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp780.pdf
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Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number wp780.

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Length: pages
Date of creation: 01 Jul 2005
Date of revision:
Handle: RePEc:wdi:papers:2005-780
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  1. Julian Birkinshaw & Neil Hood, 2000. "Characteristics of Foreign Subsidiaries in Industry Clusters," Journal of International Business Studies, Palgrave Macmillan, vol. 31(1), pages 141-154, March.
  2. Boris Majcen & Slavo Radosevic & Matija Rojec, 2003. "FDI Subsidiaries and Industrial Integration of Central Europe: Conceptual and Empirical Results," IWH Discussion Papers 177, Halle Institute for Economic Research.
  3. Andersson, Ulf & Forsgren, Mats & Pedersen, Torben, 1999. "The Mnc As A Differentiated Network: Subsidiary Technology Embeddedness And Performance," Working Papers 3-1999, Copenhagen Business School, Department of International Economics and Management.
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  9. 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.
  10. Taggart, James & Hood, Neil, 1999. "Determinants of autonomy in multinational corporation subsidiaries," European Management Journal, Elsevier, vol. 17(2), pages 226-236, April.
  11. 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.
  12. Ron Edwards & Adlina Ahmad & Simon Moss, 2002. "Subsidiary Autonomy: The Case of Multinational Subsidiaries in Malaysia," Journal of International Business Studies, Palgrave Macmillan, vol. 33(1), pages 183-191, March.
  13. Andersson, Ulf & Forsgren, Mats, 1996. "Subsidiary embeddedness and control in the multinational corporation," International Business Review, Elsevier, vol. 5(5), pages 487-508, October.
  14. Sumantra Ghoshal & Christopher A Bartlett, 1988. "Creation, Adoption and Diffusion of Innovations by Subsidiaries of Multinational Corporations," Journal of International Business Studies, Palgrave Macmillan, vol. 19(3), pages 365-388, September.
  15. Gupta, Anil K. & Govindarajan, V., 1994. "Organizing for knowledge flows within MNCs," International Business Review, Elsevier, vol. 3(4), pages 443-457, December.
  16. Katrin Männik & Helena Hannula & Urmas Varblane, 2004. "Country, Industry And Firm Size Effects On Foreign Subsidiary Strategy.An Example Of Five Cee Countries," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 27, Faculty of Economics and Business Administration, University of Tartu (Estonia).
  17. Minbaeva, Dana & Pedersen, Torben & Bjoerkman, Ingmar & Fey, Carl F. & Park, H.J., 2001. "MNC Knowledge Transfer, Subsidiary Absorptive Capacity and HRM," Working Papers 14-2001, Copenhagen Business School, Department of International Economics and Management.
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