A double-edged sword? The moderating effects of control on firm capabilities and institutional distance in explaining foreign affiliate performance

Piotr Trąpczyński , Marian Gorynia

Abstract

By drawing from the internalisation and institutional theories, as well as the organisational capability perspective, the paper analyses the moderating effects of parent control over foreign affiliates in relation to firm capabilities and institutional distance and their performance effects. These relationships are explored in the context of new MNEs from Poland as a mid-range emerging economy, for which ownership choices constitute critical decisions given their early stage of internationalisation. Our findings show that while firm capabilities drive foreign affiliate performance, the increase of parent control limits this beneficial effect, suggesting the potential occurrence of organisational inertia and reduction of learning in foreign markets. On the contrary, we also find partial evidence that the increase of parent control reduces the negative effect of institutional distance computed based on the Mahalanobis formula. Accordingly, the study suggests a certain ambiguity of parent control in affecting affiliate performance.
Author Piotr Trąpczyński (WGM / KKM)
Piotr Trąpczyński,,
- Department of International Competitiveness
, Marian Gorynia (WGM / KKM)
Marian Gorynia,,
- Department of International Competitiveness
Journal seriesInternational Business Review, ISSN 0969-5931, (A 30 pkt)
Issue year2017
Vol26
No4
Pages697-709
Publication size in sheets0.6
Keywords in Englishforeign affiliate performance, institutional distance, resource-based view, infant multinationals
ASJC Classification1403 Business and International Management; 1406 Marketing; 2003 Finance
DOIDOI:10.1016/j.ibusrev.2016.12.009
URL https://www.sciencedirect.com/science/article/pii/S096959311630350X
Languageen angielski
Score (nominal)30
Score sourcejournalList
ScoreMinisterial score = 30.0, 28-02-2020, ArticleFromJournal
Publication indicators WoS Citations = 3; Scopus SNIP (Source Normalised Impact per Paper): 2017 = 1.73; WoS Impact Factor: 2017 = 2.754 (2) - 2017=3.544 (5)
Citation count*13 (2020-10-21)
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* presented citation count is obtained through Internet information analysis and it is close to the number calculated by the Publish or Perish system.
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