Top management staffing and subsidiary performance under home-country uncertainty.

This study investigates the effects of top management staffing on foreign subsidiary performance, moderated by the occurrence of uncertainty shock in the home market. Building on a refined model of agency theory, this study introduces the context of a parent country to the existing theoretical framework and addresses the importance of appointing top managers with an intermediary status between host and home countries. The empirical evidence from foreign subsidiaries of South Korean firms in 102 countries (1992–2007) shows that assignment of immigrant top managers originating from the parent country is positively associated with subsidiary performance in the wake of home-country uncertainty. These findings highlight the benefits of appointing managers with dual knowledge structure and adaptive flexibility in the top management position in foreign locations. [ABSTRACT FROM AUTHOR]