20150605 JWB performance of MNEs from an emerging economy FINAL XL.pdf (192.01 kB)
Environmental risks, localization and the overseas subsidiary performance of MNEs from an emerging economy
journal contributionposted on 2015-08-05, 12:57 authored by Xiaohui Liu, Lan Gao, Jiangyong Lu, Eleni Lioliou
Despite the fact that multinational enterprises (MNEs) from emerging economies invest actively in host countries with substantial risks, we have limited understanding of how they manage environmental risks to achieve desirable performance in their overseas subsidiaries. Drawing on resource dependence theory, we argue that different localization strategies serve as a mediating mechanism linking environmental risks and overseas subsidiary performance. Our findings based on a sample of Chinese MNEs show that industry risks significantly reduce the levels of input localization and marketing localization of Chinese MNEs’ subsidiaries, and thus negatively affect subsidiary performance. Political risks have an insignificant impact on input localization and marketing localization, but a positive direct impact on Chinese MNEs’ overseas subsidiary performance. We also find that state-owned MNEs’ localization strategies are more sensitive to industry risks compared with privately owned MNEs.
- Business and Economics
Published inJournal of World Business
Pages356 - 368
CitationLIU, X. ... et al, 2016. Environmental risks, localization and the overseas subsidiary performance of MNEs from an emerging economy. Journal of World Business, 51(3), pp. 356–368.
- AM (Accepted Manuscript)
Publisher statementThis work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/
NotesThis paper was accepted for publication in the journal Journal of World Business and the definitive published version is available at http://dx.doi.org/10.1016/j.jwb.2015.05.002