Global market integration, efficiency orientation, and drivers of foreign subsidiary divestments

Rene Belderbos; Federico De Michiel; Leo Sleuwaegen; Shubin Wu

doi:10.1016/j.jwb.2021.101228

Global market integration, efficiency orientation, and drivers of foreign subsidiary divestments

Rene Belderbos, Federico De Michiel, Leo Sleuwaegen, Shubin Wu^*

^*Corresponding author for this work

Organisation,Strategy & Entrepreneurship

Research output: Contribution to journal › Article › Academic › peer-review

281 Downloads (Pure)

Abstract

Differences in global market integration across industries have important repercussions for MNC strategy and the drivers of manufacturing subsidiary divestment decisions. Global industry integration and the associated competitive pressures lead MNCs to adopt cost efficiency strategies for their subsidiary networks, and subsidiary divestment decisions are strongly driven by labor cost considerations. In non-integrated industries, host country demand conditions are the prime driver of divestments. These patterns are the most salient for MNCs that have aligned their strategy with the global industry environment. Analysis of the divestment hazards of 3827 Japanese manufacturing subsidiaries in 57 countries provides support for these conjectures.

Original language	English
Article number	101228
Number of pages	14
Journal	Journal of World Business
Volume	56
Issue number	5
DOIs	https://doi.org/10.1016/j.jwb.2021.101228
Publication status	Published - Aug 2021

Keywords

Affiliate divestment
Global industry integration
Responsiveness
Global strategy
Efficiency
JAPANESE ELECTRONICS FIRMS
JOINT VENTURES
INTERNATIONAL DIVERSIFICATION
MULTINATIONAL-CORPORATIONS
INDUSTRY GLOBALIZATION
EMPIRICAL-ANALYSIS
DIRECT-INVESTMENT
UNITED-STATES
REAL OPTIONS
STRATEGY

Access to Document

10.1016/j.jwb.2021.101228

Full textFinal published version, 712 KBLicence: Taverne

Cite this

@article{801b99fefe50487fa13912871a2bef6e,

title = "Global market integration, efficiency orientation, and drivers of foreign subsidiary divestments",

abstract = "Differences in global market integration across industries have important repercussions for MNC strategy and the drivers of manufacturing subsidiary divestment decisions. Global industry integration and the associated competitive pressures lead MNCs to adopt cost efficiency strategies for their subsidiary networks, and subsidiary divestment decisions are strongly driven by labor cost considerations. In non-integrated industries, host country demand conditions are the prime driver of divestments. These patterns are the most salient for MNCs that have aligned their strategy with the global industry environment. Analysis of the divestment hazards of 3827 Japanese manufacturing subsidiaries in 57 countries provides support for these conjectures.",

keywords = "Affiliate divestment, Global industry integration, Responsiveness, Global strategy, Efficiency, JAPANESE ELECTRONICS FIRMS, JOINT VENTURES, INTERNATIONAL DIVERSIFICATION, MULTINATIONAL-CORPORATIONS, INDUSTRY GLOBALIZATION, EMPIRICAL-ANALYSIS, DIRECT-INVESTMENT, UNITED-STATES, REAL OPTIONS, STRATEGY",

author = "Rene Belderbos and {De Michiel}, Federico and Leo Sleuwaegen and Shubin Wu",

note = "data source: Own database constructed from different sets of secondary data. ",

year = "2021",

month = aug,

doi = "10.1016/j.jwb.2021.101228",

language = "English",

volume = "56",

journal = "Journal of World Business",

issn = "1090-9516",

publisher = "Elsevier Inc.",

number = "5",

}

TY - JOUR

T1 - Global market integration, efficiency orientation, and drivers of foreign subsidiary divestments

AU - Belderbos, Rene

AU - De Michiel, Federico

AU - Sleuwaegen, Leo

AU - Wu, Shubin

N1 - data source: Own database constructed from different sets of secondary data.

PY - 2021/8

Y1 - 2021/8

N2 - Differences in global market integration across industries have important repercussions for MNC strategy and the drivers of manufacturing subsidiary divestment decisions. Global industry integration and the associated competitive pressures lead MNCs to adopt cost efficiency strategies for their subsidiary networks, and subsidiary divestment decisions are strongly driven by labor cost considerations. In non-integrated industries, host country demand conditions are the prime driver of divestments. These patterns are the most salient for MNCs that have aligned their strategy with the global industry environment. Analysis of the divestment hazards of 3827 Japanese manufacturing subsidiaries in 57 countries provides support for these conjectures.

AB - Differences in global market integration across industries have important repercussions for MNC strategy and the drivers of manufacturing subsidiary divestment decisions. Global industry integration and the associated competitive pressures lead MNCs to adopt cost efficiency strategies for their subsidiary networks, and subsidiary divestment decisions are strongly driven by labor cost considerations. In non-integrated industries, host country demand conditions are the prime driver of divestments. These patterns are the most salient for MNCs that have aligned their strategy with the global industry environment. Analysis of the divestment hazards of 3827 Japanese manufacturing subsidiaries in 57 countries provides support for these conjectures.

KW - Affiliate divestment

KW - Global industry integration

KW - Responsiveness

KW - Global strategy

KW - Efficiency

KW - JAPANESE ELECTRONICS FIRMS

KW - JOINT VENTURES

KW - INTERNATIONAL DIVERSIFICATION

KW - MULTINATIONAL-CORPORATIONS

KW - INDUSTRY GLOBALIZATION

KW - EMPIRICAL-ANALYSIS

KW - DIRECT-INVESTMENT

KW - UNITED-STATES

KW - REAL OPTIONS

KW - STRATEGY

U2 - 10.1016/j.jwb.2021.101228

DO - 10.1016/j.jwb.2021.101228

M3 - Article

SN - 1090-9516

VL - 56

JO - Journal of World Business

JF - Journal of World Business

IS - 5

M1 - 101228

ER -

Global market integration, efficiency orientation, and drivers of foreign subsidiary divestments

Abstract

Keywords

Access to Document

Fingerprint

Cite this