Headquarters value added and subsidiary performance: insights from Thailand

Abstract

Purpose

The purpose of this paper is to understand the impact of network relationship strength and subsidiary initiatives on the headquarters value added and performance in foreign-owned subsidiaries.

Design/methodology/approach

This study is based on survey data collected from foreign-owned subsidiaries located in Thailand. The authors use symmetric structured equation modelling partial least squared (SEM-PLS) and asymmetric fuzzy set qualitative comparative analysis (fsQCA) techniques to analyse the data.

Findings

The authors found that intra-organisational relationship strength is one of the key determinants for high headquarter value added. They also found that headquarter value added plays a crucial role in explaining subsidiary performance. The role of subsidiary initiatives seem overall less pronounced than initially thought.

Originality/value

The originality of this study lies in the conceptual framework based on networks and subsidiary initiatives. This is one of the few studies that empirically tests headquarters value-added determinants in subsidiaries located in an emerging market. Furthermore, the authors use SEM-PLS and fsQCA to look beyond more commonly tested symmetric associations.

Citation

Kingkaew, S. and Dahms, S. (2018), "Headquarters value added and subsidiary performance: insights from Thailand", Review of International Business and Strategy, Vol. 28 No. 2, pp. 150-168. https://doi.org/10.1108/RIBS-11-2017-0099