Survival of the foreign subsidiaries of TMNCs: The influence of business group affiliation

We investigate the survival rates of the foreign subsidiaries of multinational firms from India to test if affiliation to a business group affects a subsidiary's survival chances. Business group affiliation is an important organizational attribute of firms in emerging economies. Business groups...

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Bibliographic Details
Published in:Journal of international management 2007-09, Vol.13 (3), p.278-295
Main Authors: Garg, Miti, Delios, Andrew
Format: Article
Language:English
Subjects:
Affiliation
Business group affiliation
Business networks
Developing countries
Development stage
FDI
FDI Third world multinationals Business group affiliation Survival Development stage Institutional environments Liability of foreignness
Foreign enterprises
Institutional environments
Institutions
Liability of foreignness
Multinational enterprises
Organizational structure
Subsidiary
Survival
Third world multinationals
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Summary:We investigate the survival rates of the foreign subsidiaries of multinational firms from India to test if affiliation to a business group affects a subsidiary's survival chances. Business group affiliation is an important organizational attribute of firms in emerging economies. Business groups are complex organizations with heterogeneous resources that evolve along with changes in the institutional environment of a firm's home country. We examine how business group affiliation and the development stage of the host country jointly influence the survival chances of foreign subsidiaries. Our results show that business group affiliation does not have an independent influence on a subsidiary's survival rates, but it does have a contingent effect, where the contingency emerges from the development stage of the host country. Our findings thus have implications for the theory of TMNCs, and business group strategy in emerging economies.
ISSN:1075-4253
1873-0620
DOI:10.1016/j.intman.2007.05.007