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The purpose of this paper is to explore the factors influencing whether a multinational corporation (MNC) appoints an expatriate or a local national as the CEO of its subsidiary.

The study proposes a framework comprising ownership‐specific, location‐specific and internalization‐specific factors to examine determinants of expatriate CEO assignment. MNCs' subsidiaries in Taiwan were selected for the study.

For the effect on the assignment of an expatriated CEO to a subsidiary, the factors of a subsidiary's capability and size, MNC's global strategy and internalization motivation are positive; in contrast, the factor of the host country's locational advantages is negative. In addition, in circumstances of large cultural distances, the effect of high internalization motivation is positive and that of low internalization motivation is negative.

The research does not differentiate between two different types of expatriates and focuses on advanced countries' MNCs' subsidiaries in Taiwan. The theoretical implication of the study lies in the application of the perspectives of resource‐based view and transaction cost theory on an MNC's decision concerning the assignment of an expatriated CEO for subsidiaries.

MNCs could make a subsidiary's staffing decision by taking into account ownership‐, location‐, and internalization‐specific factors. Failure to do so will lead to poor operation of the subsidiary.

The research contributes to knowledge about the determinants of expatriate CEO assignment, and illuminates the importance of ownership, location and internalization factors for MNCs.

This study aims to explore the effects of subsidiary–local supplier linkage characteristics in a supply chain and the moderating effects of a multinational corporation’s (MNC’s) international experience (IE) and a subsidiary’s innovation orientation (IO) on the subsidiary’s technological capability.

A new research framework is developed comprising four constructs and six research hypotheses. Applying the regression model, the hypotheses were tested on data from Taiwanese MNC’s subsidiaries of manufacturing industries in Asian developing countries.

The subsidiary–local supplier linkage characteristics, including economic aspect: asset-specific investment (ASI) of local supplier and social aspect: relational capital (RC) of local linkage, are positively associated with subsidiary’s technological capability. Moreover, the MNC’s IE can enhance the positive effect of RC on the subsidiary’s technological capability and the subsidiary’s IO decreases the positive impact of ASI on the subsidiary’s technological capability.

This study provides useful insights into how MNCs and subsidiaries should concentrate on the factors that increase the subsidiary’s technological capability. Moreover, MNCs’ and subsidiaries’ managers must endeavor to establish long-term linkages with carefully selected local suppliers, induce these suppliers to provide appropriate ASI, and actively develop RC in the subsidiary–local supplier linkage to enhance the subsidiary’s technological capability.

This study demonstrates that subsidiary–local supplier linkage characteristics, MNC’s IE and subsidiary’s IO can be applied to examine the technological capability of subsidiaries operating in less advanced countries.

This study aims to investigate the influence of transaction cost (TC) factors and the moderating influence of firm capability factors on the extent of domestic outsourcing of a multinational corporation (MNC) subsidiary.

A new research framework is developed comprising four constructs and six research hypotheses, coupled with international experience (IE) and subsidiary scale (SS) as moderating constructs. Applying the regression model, the hypotheses were tested on data from MNC subsidiaries engaged in manufacturing in Taiwan, based on the TC theory, resource‐based view, and outsourcing literature.

The TC factors, including environmental dynamism and subsidiary technology level, are negatively related with degree of domestic outsourcing. Moreover, the MNC IE and SS can reduce the TCs, thus increasing the degree of domestic outsourcing by MNC subsidiaries at the high environmental dynamism and subsidiary technology levels.

The study data were obtained from MNC subsidiaries operating in Taiwan, and the single country research design is a limitation of this study.

This study provides useful insights into how MNCs and subsidiaries should concentrate on the factors that increase the TCs of domestic outsourcing. Moreover, MNCs and subsidiaries must endeavor to cultivate and apply capabilities to mitigate TCs and fully realize the benefits of domestic outsourcing.

This study demonstrates that TC factors can also be applied to examine the outsourcing strategies of firms operating in less advanced countries. Additionally, the capability factors of MNCs and subsidiaries can reduce TCs, thus increasing domestic outsourcing by subsidiaries.