Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
1001324 | International Business Review | 2014 | 10 Pages |
•Building RBSs with key institutional actors will create competitive advantages for WOFSs.•RBSs will mediate the relationship between WOFS dynamic capability building and competitive performance.•Dynamic capability building and RBS deployment by WOFSs will strengthen as institutional uncertainty increases.
Drawing from dynamic capability, institutional, nonmarket strategy, and social-network literatures, we detail wholly owned subsidiary (WOFSs) relation-based strategies (RBSs). We explain how deploying RBSs with key nonmarket and market actors will create competitive advantages for WOFSs operating in volatile emerging market environments. We posit that dynamic capabilities will drive the deployment of RBSs by WOFSs, and argue that the positive relationship between dynamic capabilities and RBS deployment will strengthen as perceived institutional uncertainty increases. We further suggest that the greater the strength and frequency of RBS deployment, the more likely that a WOFS will establish a combination of nonmarket-based and market-based embedded assets. Also, our theory proposes that greater integration of nonmarket-based and market-based assets will enhance WOFS financial performance outcomes. Implications for future research are discussed.