1. Protectionism and its Impact on MNC Subsidiaries' Performance
- Author
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Ghauri, Pervez N., Xiao, Shufeng Simon, Park, Byung Il, and Choi, Seong-Jin
- Subjects
Emerging markets ,Brand equity ,International business enterprises ,Protectionism ,Business ,Business, international - Abstract
This study investigates the relationship between local protectionism and performance of multinational corporation (MNC) subsidiaries in China. We integrate overarching theories (i.e., institutional theory and extended resource-based view) to investigate a model for identifying whether local protectionism at the subnational level is beneficial or detrimental for foreign subsidiary operations or functions as a double-edged sword. We also examine whether or not internal organizational capabilities and relational capital with government moderate the effects. On the basis of regression analyses, our empirical findings reveal that the positive or negative effects of subnational protectionism in China depend on performance types. Moreover, performance contribution is considerably moderated by various internal capabilities of MNC subsidiaries. Findings offer valuable and practical implications for MNCs intending to invest in emerging economies. Keywords Subnational protectionism * Performance * Technological capability * Marketing capability * Government--firm relationship, 1 Introduction Theory of multinational corporations (MNCs) proposes that firms investing overseas need to possess firm-specific advantages (FSAs), particularly to combat the liabilities of foreignness (LOF) and outperform their local [...]
- Published
- 2023
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