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One important strategy Multinational Enterprises (MNEs) employ to compete in the global market is to engage in foreign investment, but firms must know how they can perform better in the host country market. International subsidiaries’ performances play a chief role for MNEs’ globalization strategy. The purpose of this paper is to construct multi-level research with parent-level data at the higher level and subsidiary-level data at the lower level.

This study helps capture the rapid growing trend in emerging markets and uses a sample of Taiwanese enterprises and their subsidiaries in China. The data come from the Taiwan Economic Journal database. Precisely, the authors obtain 711 Taiwanese MNEs and 4,458 of their subsidiaries in China.

This study finds among the parent company’s attributes that firm size, firm total performance, depth of internationalization and foreign shareholding have significant impacts on subsidiary performance, while within the subsidiary’s attributes, subsidiary size, subsidiary-owned capital and total investment fund significantly affect subsidiary performance.

In order to capture subsidiary performance, this study uses a multi-level analysis approach with the Hierarchical Linear Model statistic method to separate parent company attributes and subsidiary-owned attributes as two distinct levels. This method fills the gap in the literature by analyzing subsidiary performance and clarifying that foreign direct investment is a multi-level phenomenon that cannot be analyzed using a one-level analysis method.

Although emerging markets are distinctly known for the rapid growth and international expansion of their state-owned enterprises, little is known about the influence of parent resource advantages and mixed state ownership on a subsidiary’s performance. Using the resource-based view, this study aims to investigate how resource advantages from the parent company and state ownership influence the performance of subsidiaries.

This study included a unique data set of 207 subsidiaries from 33 large Brazilian multinationals located in 32 countries from 2000 to 2015. The authors used a hierarchical linear modeling and a multilevel structure based on data at different levels to analyze the influence of home-country parent resource advantages and state ownership on host-country subsidiary’s performance.

This study illustrates that state ownership can alleviate the resource advantages of parent companies. Evidence is presented, indicating that low and medium degrees of state ownership have a negative impact on the resource advantages of the parent company, consequently reducing the subsidiary’s performance. Moreover, this study highlights that low and medium degrees of state ownership lead to conflicting interests between state ownership and parent resource advantages, resulting in an overall decline in subsidiary performance.

This research contributes new evidence regarding state ownership and resource advantages to the field of international business studies and the domain of Latin American multinational enterprises, Multilatinas. The results suggest that low and medium levels of state ownership diminish the influx of resources from parent companies, thereby restricting the subsidiary’s performance.

This study aims to investigate the influence of parent company personnel embedding on the stock price crash risk (SPCR) of listed companies, along with the moderating effect of disparate locations between parent and subsidiary companies and other major shareholders.

This research empirically tests hypotheses based on a sample of listed subsidiaries in China during the period between 2006 and 2021.

Our results demonstrate that personnel embeddedness in the parent company significantly alleviates SPCR in subsidiaries. This effect is even more substantial when the parent and subsidiary companies are in different places. However, other major shareholders in the subsidiary company weaken it. Our additional analysis indicates that, relative to executive embeddedness, director embeddedness exerts a stronger effect on the SPCR of the subsidiary. Mechanism examination reveals that the information asymmetry and the level of internal control (IC) within the subsidiary are significant channels through which the personnel embeddedness from the parent company influences the SPCR of the subsidiary.

This study expands the literature on how personnel arrangements in corporate groups within emerging countries influence SPCR. We have extended the traditional concept of interlocking directorates to corporate groups, thereby broadening the understanding of the governance effects of interlocking directors and executives from a group perspective.

Prior literature shows that income shifting is widely performed by multinational groups, but no research as yet has studied alignment between controlling and minority interests on tax avoidance in multinational groups with high ownership concentration. This study aims to analyze the effect of high ownership concentration on cross-jurisdictional tax-motivated income shifting.

To test the hypotheses, this study focuses on European multinational groups. Data are collected on European parent firms and each subsidiary. The model considers the natural logarithm of profit before tax and tax incentive.

Findings show that subsidiaries shift income for tax avoidance purposes. The alignment of shareholders’ interests and ownership concentration leads to higher levels of tax avoidance through subsidiaries’ infra-group transactions. High ownership concentration decreases the influence of minority interests and allows parent company shareholders to choose a tax avoidance strategy more freely.

The results suggest that taxation levels need to be harmonized to reduce the incentive for tax avoidance and the incentive of governments to reduce their statutory tax rate, to shift profits inwards and reduce outward flow. Without international coordination, this approach may lead to the unevenness of legislative frameworks around the world, and bring significant disadvantages for some countries, influencing economic growth and business development.

This study extends prior findings showing that tax-motivated income shifting as a method of tax avoidance in European multinational groups is stronger in groups with high levels of ownership concentration. This means that managers have the incentive to shift income between subsidiaries for tax and ownership benefits in favor of the parent company’s shareholders and against minority interests.

Drawing on empirical data from two studies of 119 Japanese affiliates located in the United States and Europe, this chapter focuses on three fundamental questions: (1) What organizational factors influence performance of the overseas affiliates of Japanese MNCs? (2) What impact does expatriate staffing have on the affiliate’s performance? (3) What factors influence expatriate staffing patterns in Japanese MNCs? The empirical results lend support to the hypothesis that MNCs characterized by global integration and local responsiveness will outperform less transnational competitors, although there are significant differences between the American and European subsamples on the impact of expatriate presence on affiliate performance. In addition, there is no support for the life-cycle prediction that age or parent company experience influences expatriate staffing levels or for the resource dependence prediction that integration with the parent influences expatriate presence. These results and their implications are discussed.

Recent research on intra‐organizational knowledge‐transfer showed that new capability development within multinational corporations shifts from parent companies to foreign subsidiaries. This paper seeks to identify antecedents and barriers for reverse capability‐transfer in multinational corporations.

The paper adopts a multiple case study approach based on active interviews at six subsidiaries of a multinational manufacturing company.

The results suggest that subsidiary autonomy, environmental heterogeneity, and managerial initiatives are all necessary antecedents of unique capability development at the subsidiary level, but that companies do not utilize foreign subsidiary‐originated capabilities in their home‐country operations. The results also show that person‐to‐person communication is required for intra‐MNC capability‐transfer in any direction, and that other forms of communication seem to be inefficient.

A logical next step is the investigation of the phenomenon at the headquarters level with the goal to identify specific barriers for reverse capability‐transfer.

The findings support the idea that managers of multinational corporations should recognize that new unique capabilities originate not only at the parent company level but also at the foreign subsidiary level, and that it could be beneficial for the company as a whole to transfer these new capabilities back to the home country operation.

The study shows that in‐depth interviews provide the richest form of data for this type of research. Moreover, it provides a counter‐intuitive perspective on intra‐organizational knowledge and capability‐transfer in multinational corporations.

This article develops a new conceptual model of knowledge flows within international service firms. Our model takes explicit account of the critical role of relationships and the individual as being central to the process of knowledge transfer for service firms. The model is then validated with data collected from five international service firms using critical event analysis techniques. The findings reinforce our contention that the individual plays a critical role in the process of knowledge transfer and that relationships form an integral part of this process. The implications of this finding are also discussed.

The aim of the paper is to identify the determinants of the marketing and managerial knowledge transfer from a foreign subsidiary located in a post-transition country to its headquarters established in a developed country.

The authors combined the critical literature studies and empirical research, where the method of Computer-assisted Telephone Interview (CATI) was applied. The empirical data was gathered from 231 manufacturing foreign subsidiaries established in Poland (as one of the post-transition economy). To test the hypotheses logistic regression was applied.

The knowledge accumulated in the foreign subsidiary, the amount and level of novelty of innovation in the foreign subsidiary and its strategic autonomy is crucial for the occurrence of the reverse knowledge transfer. However, the more powerful the foreign subsidiary is, the less eager it is to transfer marketing and managerial knowledge to the headquarters.

The study is concentrated just on the manufacturing sector in the Polish economy. The results are based on the opinions and perception of managers, but they represent the corporate perspective (not their individual ones).

The study provokes asking the question about the proper level of strategic autonomy of a foreign subsidiary. The implication related to the autonomy is much about the proper strategy for human resources management. The obtained results indicate that the intensity of innovation in a foreign subsidiary “translates” to the outflow of knowledge from a foreign subsidiary to its headquarters. Thus, encourages headquarters to let their subsidiaries innovate still monitoring their power.

FSs are entities more or less embedded in the host markets, thus their strength and sustainable existence is important for their stakeholders, in particular – internal entities such as employees and external entities such as suppliers, and other cooperating organisations and institutions in the host market. The contribution of FSs to the innovation performance and knowledge pool of external partners is determined much by their absorptive capacity. Thus, the results obtained indirectly point to the importance of external agents ability to absorb and exploit the knowledge.

The originality of the paper concerns three issues. Firstly, the previous studies are mainly focused on either developed or emerging markets and as a result, the peculiarity of post-transition economies, like Poland has been neglected. Secondly, the determinants of reverse knowledge transfer are presented from the corporate perspective. Thirdly, authors focus on marketing and management knowledge distributed from a foreign subsidiary to its headquarter.

The purpose of this paper is to provide a comprehensive initial evaluation of divestiture gains for reacquired carve‐out parent and subsidiary second event and three‐year returns for the period 1980‐2010.

Using several variables, we contrast reacquired carve‐out parent and subsidiary second event returns with those for acquired carve‐outs. Similarly, we contrast carve‐out parent three‐year returns.

We observe several differences between reacquired (RACO) and acquired (AQCO) carve‐outs. Indicating less competition for RACO prices, RACOs have lower market capitalization on the day before reacquisition. Supporting a certification effect for Thermo Electron, parent three‐year post reacquisition returns are positive versus negative returns for other RACO parents. Our multiple regression variables explain 27.53 percent of the subsidiary reacquisition announcement returns of 11.63 percent and explain 19.84 percent of the variation of parent three‐year returns.

This study makes several contributions to the literature. It is the first study to contrast the long‐term results of reacquired carve‐outs and their parents with those of acquired carve‐outs and their parents. Also, Gleason et al.’s study of reacquired carve‐outs has been extended in several ways. First, parent company three‐year returns after the reacquisition was examined. Next, returns for reacquired carve‐outs were contrasted with acquired carve‐outs. Updating Allen's study, it is reported that, except for one subsidiary acquired by a third party, all subsidiaries were reacquired by Thermo Electron.

The rapid development of multinational companies (MNCs) has resulted in the need for accounting systems which function to report, evaluate and control international operations and their managers' effectiveness. While the problems surrounding the evaluation and control of domestic firms remain the same for MNCs' parent company managers, the question of which country's currency should be used in the evaluation process represents additional complexities for them. The choice is essentially either that of the parent company currency or the currency of the foreign subsidiary. Parent company managers may also use both of these currencies, but it is likely that this choice will result in different decisions regarding the performance of foreign operations (see Demirag, 1987,1987a, 1987b). The aim of this paper is to critically review the theoretical and empirical literature on the use of parent and/or foreign subsidiary accounting information used by multinational companies in the evaluation of their foreign subsidiary operations and managers. In doing so, the paper addresses the following two questions. First, to what extent is translated information, untranslated information or both types of information significant in the evaluation of foreign subsidiary operations and their managers' performance in MNCs? Second, what are the major contextual variables which influence MNC foreign currency accounting practices in performance evaluations?