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    Autonomy delegation to foreign subsidiaries: An enabling mechanism for emerging-market multinationals

    Access Status
    Fulltext not available
    Authors
    Wang, S.
    Luo, Yadong
    Lu, X.
    Sun, J.
    Maksimov, V.
    Date
    2014
    Type
    Journal Article
    
    Metadata
    Show full item record
    Citation
    Wang, S. and Luo, Y. and Lu, X. and Sun, J. and Maksimov, V. 2014. Autonomy delegation to foreign subsidiaries: An enabling mechanism for emerging-market multinationals. Journal of International Business Studies. 45 (2): pp. 111-130.
    Source Title
    Journal of International Business Studies
    DOI
    10.1057/jibs.2013.40
    ISSN
    0047-2506
    School
    School of Management
    URI
    http://hdl.handle.net/20.500.11937/50013
    Collection
    • Curtin Research Publications
    Abstract

    Current theory on foreign subsidiary autonomy is insufficient to examine a situation where a multinational lacks experience to organize global operations, and yet intends to compete extensively with established multinational enterprises (MNEs) from advanced economies. By building on theoretical perspectives developed for emerging-market multinational enterprises (EMNEs), we advance the idea that foreign subsidiary autonomy is a strategic mechanism to overcome the EMNE's weaknesses in managing globally dispersed businesses and their home-country disadvantages after foreign entry. Subsidiary autonomy delegation assists in performing the learning functions necessary for overcoming resource and capability voids, as well as for distancing the subsidiary administratively from the parent's negative home-country institutional heritage. Analyses of survey data collected from headquarter senior executives of 240 Chinese MNEs suggest that subsidiary autonomy delegation is higher among firms relying on foreign markets as a springboard to acquire strategic assets, whose top managers at the headquarters perceive high domestic institutional constraints, and which do not count on government assistance to expand internationally. Further, we demonstrate that these relationships are strengthened with greater inward foreign direct investment cooperative experience, and with the use of merger and acquisition entry modes. These findings have important implications for theories on subsidiary autonomy.

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