Foreign subsidiary top manager nationality and language policy: The moderating effects of subsidiary age and size

• I use agency theory to explain the effects of top manager nationality, and subsidiary age and size on language policy.
• I found that subsidiaries with expatriate top managers have more language policies.
• I found that older and larger subsidiaries with expatriate top managers have more language policies.

Despite their alleged communication, control, coordination, and learning-related benefits, little is known of factors that affect language policies in multinational corporations (MNCs). In this paper, I draw on agency theory to focus on the effect of MNC subsidiary top manager nationality on subsidiary language policy. Specifically, I hypothesize that subsidiaries with expatriate top managers have more language policies than subsidiaries with host country national top managers. In addition, I hypothesize that subsidiary age and size moderate the effect between subsidiary top manager nationality and language policy, such that older and larger subsidiaries with expatriate top managers have more language policies than younger and smaller subsidiaries. Survey data from 547 subsidiaries in Japan provide support for these hypotheses. Theoretical implications and suggestions for future research are provided.