Subsidiary capability development in multinational enterprises: An empirical investigation

Abstract

This chapter provides an empirical investigation into the process by which subsidiaries in multinational firms add capabilities in a given line of business. We describe the process of subsidiary capability development as a non-recursive relationship between the parent's transfer of decision-making power and capability development, which then affects subsidiary performance. The empirical results from survey data confirm such mutually reinforcing mechanisms and highlight the importance of both external and internal forces that facilitate or impede the developmental process.

Citation

Chang, S.-J. and Rosenzweig, P.M. (2009), "Subsidiary capability development in multinational enterprises: An empirical investigation", Cheng, J.L.C., Maitland, E. and Nicholas, S. (Ed.) Managing, Subsidiary Dynamics: Headquarters Role, Capability Development, and China Strategy (Advances in International Management, Vol. 22), Emerald Group Publishing Limited, Leeds, pp. 93-121. https://doi.org/10.1108/S1571-5027(2009)0000022009