Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
1001607 | Journal of World Business | 2012 | 9 Pages |
Abstract
It is widely accepted that business relatedness, defined as the extent to which a foreign subsidiary is related to its parent's core business, has a positive effect on subsidiary performance. With a sample of 165 Japanese subsidiaries located in China, however, we found that modestly related subsidiaries, on average, outperformed both unrelated and closely related subsidiaries, and that closely related subsidiaries performed poorly especially when the parent had a heavy majority ownership in the subsidiary and the subsidiary was at its early stage of operating in the host market. Our results indicate that being too closely related to the parent could be potentially detrimental, suggesting a liability of closeness.
Keywords
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Business and International Management
Authors
Jianyun Tang, W. Glenn Rowe,