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The purpose of this paper is to investigate the operating and stock performance of subsidiaries prior to a parent–subsidiary merger and examine whether minority shareholders benefit from such a merger.

This paper employs a refined performance-adjusted discretionary accrual model as a measure for earnings management prior to parent–subsidiary mergers.

This paper finds evidence supporting the notion that subsidiaries’ operating performance is manipulated downward prior to parent–subsidiary mergers, but the incentive to expropriate minority shareholders depends on a parent’s percentage ownership of its subsidiary prior to the merger.

The findings of this paper have practical implications for investors and especially for policy makers to regulate this type of mergers.

This study contributes to the thin literature on parent–subsidiary mergers by providing empirical evidence that parent companies can expropriate their minority shareholders’ wealth in these mergers. This finding is consistent with the minority expropriation hypothesis, which contradicts the findings in prior studies on this unique type of mergers.

Many companies are part of parent‐subsidiary supply chains, i.e. organisations where a parent company receives products from its subsidiary or the other way around. Having this close relationship in a supply chain network opens the possibilities for different setups of enterprise resource planning (ERP) systems across such companies. This paper clarifies the different ERP system strategies for companies in parent‐subsidiary supply chains and the consequences of choosing the different strategies.

In order to position the contributions of the paper, literature on the use of ERP systems in supply chain management (SCM) is investigated. Next, four archetypical ERP system setups across parent‐subsidiary supply chains are defined. The consequences of the four defined setups are deduced. Three case studies are presented to justify the relevance of the defined four ERP system strategies and to further investigate the consequences of choosing these (one case study represents two strategies).

The paper shows that there are significant impacts of choosing one of the four ERP system setups across parent‐subsidiary supply chains, e.g. quality of communication, degree of local management, synergy effects, etc. Furthermore, the paper shows that extant literature dealing with ERP systems and SCM fails to consider this aspect, which may at worst lead to incorrect generalisations.

The paper clarifies the importance of considering different ERP system setups in parent‐subsidiary relationships. Future research in ERP systems and SCM needs to focus more on this aspect.

The paper provides an improved basis for companies in parent‐subsidiary supply chains that are to implement ERP systems or are to rethink their current ERP strategy.

The definition of ERP system setups across parent‐subsidiary supply chains and the clarification of the consequences of these strategies represent new and useful contributions to the SCM and the ERP literature.

In spite of the large body of literature on success factors of enterprise resource planning (ERP) implementation, there is a need to explore its multinational dimension. The purpose of this paper is to explore the impact of the conflict between parent and subsidiary on the process of ERP implementation in a multinational enterprise (MNE).

Using an interpretive case study methodology, this paper analyses the theoretical frameworks of parent-subsidiary conflict and applies them to interpret an in-depth case study and generate a set of managerial prescriptions.

Theoretical analysis and case evidence suggest that managing parent-subsidiary conflict is a critical success factor of ERP implementation in MNEs.

This case relates to a diversified multinational group producing a variety of materials through subsidiaries. The data collection includes multiple sources in the company, and strong theoretical development provides a high level of generalizability. The paper shows that managers should consider the impact of conflict from the planning stages of any multinational ERP implementation.

A detailed set of practical managerial prescriptions is derived from case and theoretical analysis. These prescriptions provide guidance to multinational managers planning a successful global ERP rollout.

Although parent-subsidiary conflict is clearly a major factor in multinational ERP implementations, this topic has never been analysed in detail in the literature. This paper breaks new ground applying grounded theoretical frameworks of parent-subsidiary conflict to an implementation case, and providing managerial guidance for implementation decisions.

The purpose of this paper is to emphasize that procedural justice has a contribution to parent‐subsidiary links within multinational enterprises (MNEs).

A mailed survey is adopted in this study. A total of 152 valid and complete questionnaires were returned from the respondents. Structural equation modeling and Chow test are used in this research paper.

Based on structural equation modeling, three significant dimensions of the parent‐subsidiary links are found to contribute to the financial performance of the subsidiaries (resource commitment, information flow, and control flexibility). Based on Chow test, these dimensions can lead to better financial performance under greater procedural justice in the decision‐making processes of MNEs.

This study only collected information from Taiwanese multinational firms in East Asia and the Pacific countries, including China, Indonesia, Malaysia, Philippines, Thailand and Vietnam. Generally, these regions are the emerging market, with structurally volatile but fast‐growing economies. In addition, further studies can extend the research to other countries. Environmental interferences, such as culture and legal rules, were not considered in this study.

In reality, although the due process is sometimes neglected because of time limitations or lack of patience, superior managers still should pay more attention to the processes of strategic decision making to keep the procedure fair and transparent.

This paper underlines the importance and value of the procedural justice in MNE management. The exercise of the procedural justice motivated subsidiary managers to aim for better financial performance with voluntary effort and their best ability.

In order to effectively promote the deep integration of artificial intelligence and the real economy and empower real enterprises to improve quality and efficiency, this study regards the CEO as a high-end innovation resource and aims to empirically test the impact of scholar-type CEOs on the industrial artificial intelligence (AI) transformation of manufacturing enterprises.

Grounded on the upper echelons theory, this paper preliminarily selects A-share manufacturing listed companies in Shanghai Stock Exchange and Shenzhen Stock Exchange that are affiliated to enterprise groups from 2014 to 2020 as samples. Furthermore, the Logit regression is conducted to analyze the influence of scholar-type CEOs about industrial AI transformation.

The results show that scholar-type CEO plays a significant role in promoting industrial AI transformation. The parent-subsidiary corporations executives' ties positively moderates the impact of scholar-type CEOs on industrial AI transformation. Further, internal control quality plays a partial mediating role between scholar-type CEOs and industrial AI transformation. Compared with private enterprises, scholar-type CEOs play a stronger role in promoting industrial AI transformation of state-owned enterprises.

First, this paper expands the research related to the influencing factors of industrial AI transformation based on upper echelons theory and clarifies the influencing mechanism of scholar-type CEOs affecting industrial AI transformation from the perspective of executives' behavior. Second, this study further enriches the research framework on the economic consequences of scholar-type CEOs and provides a useful supplement to the research literature in the field of upper echelons theory. Third, this paper is not limited to a single enterprise but involves the management practice of resource allocation within the enterprise groups, further clarifies the internal logic of the decision-making of industrial AI transformation of listed companies within the framework of enterprise groups, providing theoretical reference for the scientific design of the governance mechanism of parent-subsidiary companies.

This study aims to explore capability upgrading of EMNE’s subsidiaries in developed countries and how the parent-subsidiary relationship influences such upgrading.

The study adopts an interdisciplinary approach to capability upgrading of EMNEs subsidiaries in developed countries. It employs a single case study to explore this under-research area.

The analysis challenges the orthodox view and suggests broad-based capability upgrading has taken place in the EMNE-acquired subsidiaries ranging from product, process, functional to intersectoral. In addition, the capability upgrading was contingent on the degree of subsidiary autonomy and subsidiary mandates.

This study represents one of the first to examine capability upgrading and parent-subsidiary relationship in the context of EMNEs’ internationalisation activities.

With the development of the economy, an increasing number of listed companies form subsidiaries in China. Though the increase in the number of subsidiaries affects the hierarchical structure and risk of conglomerates, few studies relate the hierarchical relationship between the parent company and its subsidiaries to its capital market performance at the conglomerate level. Therefore, this study aims to investigate the relationship between the number of subsidiaries and crash risk.

Using a sample of all the A-share companies in the Shanghai and Shenzhen stock markets from 2007 to 2015, this study conducts multivariate regression analyses between the number of subsidiaries and the stock price crash risk.

This study finds an inversed U relationship between the number of subsidiaries and the stock price crash risk, and the above inversed U relationship is steeper in conglomerates with stronger managerial power and less finance distress.

This research has an incremental contribution to the agency problem and governance effect of the parent–subsidiary system in conglomerates. To the best of the authors’ knowledge, this is the first study to show a significant quadratic relationship between the future crash risk and the number of subsidiaries. This paper provides new evidence that the number of subsidiaries has an incremental ability to predict future firm-specific crash risk above other predictors identified by previous research.

The relationship between parent firms and their subsidiaries is a crucial aspect of corporate governance, and is increasingly complex in the global environment. We analyze an organizational arrangement quite common in Japan, the corporate spinoff, focusing on the relationship between parent firms in the Japanese service sector and their spinoff subsidiaries. The level of parental ownership is negatively related to the parent firm's net income and number of subsidiaries, but positively related to its advertising expenditures. In addition, parent firms tend to have lower ownership of more profitable subsidiaries. The ownership arrangement between the parent and the subsidiary appears to be based on issues broader than direct profit maximization.

To better understand the relationship between the headquarters and subsidiaries of multinational corporations, we introduce and test a theoretical framework that builds on and extends the positive agency theoretic corporate governance literature. Results indicate that there are three types of subsidiary bundles of corporate governance mechanisms that are used by multinational corporations. In addition, the following factors can help predict what type of subsidiary bundle a multinational corporation will use to align the interests of its headquarters with a particular subsidiary: the multinational corporation’s international strategy, its subsidiary’s importance, environmental uncertainty faced by its subsidiary, and its subsidiary’s age.

This study aims to investigate the impact of the development of high-speed rail (HSR) network on earnings management, especially on the trade-off between the usage of accruals-based earnings management (AM) and real earnings management (RM) techniques, and consequently, examines the extent to which the HSR network–earnings management nexus is moderated by governance and religion factors.

Using a sample of Chinese A-listed firms over an 11-year period, this study uses regression techniques as the baseline methodology while controlling for industry and year-fixed effects. The authors also use endogeneity tests (including instrumental variable method, Generalized Methods of Moments estimation and difference-in-difference) and different robustness checks.

The key findings are threefold. First, the HSR network development reduces AM. This suggests that the presence of HSR network is effective in reducing information asymmetry. Second, the use of RM technique increases with the HSR network development. This indicates that managers do not seem to engage in less earnings management with the HSR network development but instead appear to switch from the easy-to-detect AM to the more costly RM approach. Finally, the HSR network and earnings management nexus is moderated by governance and religion factors.

This study provides new evidence on the trade-off between AM and RM by managers and pioneers in examining the impacts of governance and religion factors on the relationship between the HSR network and the trade-off of earnings management techniques.