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This study explores when wholly owned subsidiaries outperform joint ventures with local partners. In order to avoid the endogeneity problem inherent in foreign subsidiaries' operating mode decisions that might confound performance measurement, we employ the propensity score matching method, along with the difference-in-differences approach, and compare the performances of joint ventures turned wholly owned subsidiaries vis-à-vis continuing joint ventures. Based on foreign subsidiaries' financial data in China for 1998—2006, we find strong evidence that converted wholly owned subsidiaries outperform continuing joint ventures in industries characterized by high levels of intangible assets such as technology or brand, after controlling for factors that may affect the conversion decision. This finding is consistent with the prediction of transaction cost theory.

What determines the value an MNC's headquarters adds to its own affiliates? In this paper, we shed light on this question by linking the embeddedness view of the multinational corporation to the literature on parenting advantage. We test our hypotheses on an original dataset of 124 manufacturing subsidiaries located in Europe. Our results indicate that the external embeddedness of the MNC is an antecedent to headquarters' value creation. We find that headquarters' investments into their own relationships with the subsidiaries' contexts are positively related to the value added by headquarters. Furthermore, this relationship is stronger when the subsidiary itself is strongly embedded. We discuss implications for the MNC literature, embeddedness research, and the literature on parenting and headquarters' roles.

This research focuses on relational and contractual mechanisms and examines their impact on foreign subsidiaries' acquisition of tacit and explicit knowledge from local suppliers. Using survey data from 168 foreign subsidiaries operating in China, this study finds broad support for the proposed analytical framework. When the foreign subsidiary and supplier share common goals, the foreign subsidiary acquires greater levels of both explicit and tacit knowledge; trust between the two parties promotes the acquisition of greater levels of tacit than explicit knowledge. However, access to the local supplier network through the focal supplier enables the foreign subsidiary to acquire greater levels of explicit but not tacit knowledge. Formal contracts play a complementary role in knowledge acquisition: contracts enhance the acquisition of explicit knowledge and further strengthen the effects of relational mechanisms on tacit and explicit knowledge acquisition. Overall, these findings provide important implications for foreign subsidiaries regarding how to acquire local knowledge in host countries through both formal and informal mechanisms.

This study focuses on the role of geography in foreign subsidiary survival in host countries afflicted by political conflict. We argue that survival is a function of exposure to conflicts, and depends on the characteristics of place (the conflict zone) and space (geographic concentration and dispersion of other home-country firms). The roles of place and space are explored using street-level analysis of geographic information systems data for 670 Japanese multinational enterprises (MNE) subsidiaries in 25 conflict-afflicted host countries over 1987—2006. Through dynamic modeling of conflict zones as stretchable and shrinkable places relative to subsidiary locations, we develop a means of characterizing a foreign subsidiary's exposure to multiple threats in its geographic domain. Our results show that greater exposure to geographically defined threats, in both a static and a dynamic sense, reduces the likelihood of MNE survival. The findings indicate, moreover, that both concentration and dispersion with other firms affect survival; however, the effects depend on where the firm is spatially located (whether the firm is in a conflict zone) and with whom (home-country peers or sister subsidiaries).

What explains the heterogeneity of foreign subsidiary performance? Previous studies have emphasized the importance of industry, corporate parent, and home-country effects on the variation of foreign subsidiary performance. Building on recent international business and economic geography research, this study examines the extent to which subnational region effects can also explain such performance variation. We empirically decompose the variance of the performance of Fortune Global 500 Corporations' subsidiaries in China during 1998—2006. Results show that not only are subnational region effects statistically significant in explaining the variation of subsidiary performance, but their interactions with industry, corporate parent, and home-country effects are also significant and economically important. We further show that subnational region effects tend to be stronger in the period prior to China's WTO accession, and in the country's less-developed subnational regions. Our findings highlight the importance of considering both the direct and indirect roles of subnational region in shaping firms' strategy and performance in international business research.

Applying a new theoretical and empirical approach to intrafirm knowledge transfers, this paper provides some initial insight to the little-researched phenomenon of why some subsidiaries are isolated from knowledge-transfer activities within the multinational corporation (MNC). Knowledge transfer is framed as a problemistic search process initiated by the recipient unit. We show that knowledge flows from units that are perceived to be highly capable to units that perceive themselves to be highly capable. Knowledge flows are also associated with existing levels of communication and reciprocity. Taken together, these findings suggest that knowledge transfers in MNCs typically occur between highly capable members of an \"in crowd,\" and the isolated minority rarely, if ever, engages in knowledge-sharing activities. Finally, we show that the isolated minority underperforms other subsidiaries, suggesting the possibility of a \"liability of internal isolation.\"

Using data from a sample of foreign subsidiaries established in the U.S. by firms from 27 countries between 1998 and 2003, this study examines the relationship between immigrants and the foreign expansion of organizations from their home countries. I propose that common country bonds to immigrants can become unique channels of knowledge, providing firms with idiosyncratic benefits in foreign places. Such connections to co-national immigrants should positively influence location choice and survival through processes of local learning and knowledge transfer. The results support these predictions. The probability of locating operations and surviving in a state increases with the concentration of same-nationality immigrants in that state, but not with the presence of immigrants of other nationalities. To highlight the knowledge-related mechanisms, I show that these relationships are particularly strong for firms lacking prior experience in the country, for locations in which immigrants can help firms capitalize on industry-specific knowledge spillovers, and for firms with highly knowledgeintensive operations.

The phenomenon of subsidiary initiative has received increasing attention in recent years, but the consequences of initiatives and the associated dynamics of headquarters-subsidiary relationships have received much less research attention. Building on resource dependence theory and self-determination theory we argue that two basic goals subsidiary managers pursue are to achieve autonomy vis-à-vis corporate headquarters, and influence over other units. We investigate how a subsidiary's past initiatives contribute to its bargaining power, and how headquarters' response - through granting attention or monitoring - affects the realization of the subsidiary's goals. Using structural equation modeling, our hypotheses are tested by drawing on a sample of 257 subsidiaries located in three different countries (Australia, Canada and the United Kingdom). Our results show that subsidiaries are not able to increase their influence through initiatives unless they get headquarters' attention. We also find that subsidiary initiatives have a direct effect on subsidiary autonomy, but the caveat is that initiatives also evoke headquarters monitoring, which in turn decreases the subsidiary's autonomy. In addition to providing insights into how subsidiaries can achieve their goals, the paper also sheds light on the critical role headquarters plays in leveraging initiatives, and the influence of individual subsidiaries in the multinational enterprise.

In \"Probing Theoretically into Central and Eastern Europe: Transactions, Resources, and Institutions,\" we outlined the contributions of research in Central and Eastern Europe (CEE) to theoretical debates in business research. In this retrospective, we reflect upon the evolution of the field over the past decade. With the fading impact of CEE's distinct shared history, we suggest that CEE best be analyzed as emerging economies, rather than as a distinct geographic entity. Emerging economy business research is converging on common themes and shared theoretical ideas, while identifying critical variations that constrain generalizations among and beyond emerging economies. This research thus highlights the need to develop a better understanding of the boundary conditions of scholarly theories of business knowledge. Over the past decade, the institutionbased view has emerged from distinct intellectual traditions in institutional economics, organizational theory, and the analysis of business-government bargaining. Research in these converging lines of theorizing places contextual variations at the center of explanations of business phenomena around the world. We suggest that the institution-based view is evolving toward a paradigm, and offer suggestions on how to advance this research agenda further, in particular by exploring how firms engage with different sets of potentially conflicting institutions at multiple levels and locations.

The determinants of R&D intensity differ between subsidiaries in a multinational enterprise (MNE). Previous literature suggests that whether a subsidiary achieves a competence-creating output mandate depends on the qualities of its location. R&D strategies in competence-creating subsidiaries are supply-driven while those in purely competence-exploiting subsidiaries are demand-driven. Using data on U.K. subsidiaries of non-U.K. MNEs, we find that the level of subsidiary R&D depends on MNE group-level and subsidiary-level characteristics as well as locational factors. The R&D of mandated subsidiaries rises with acquisition, but for non-mandated subsidiaries R&D falls upon acquisition. MNEs that grow through acquisition have more inter-subsidiary R&D diversity.