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When Do Distance Effects Become Empirically Observable? An Investigation in the Context of Headquarters Value Creation for Subsidiaries

Beugelsdijk, Sjoerd and Nell, Phillip C. and Ambos, Björn (2017) When Do Distance Effects Become Empirically Observable? An Investigation in the Context of Headquarters Value Creation for Subsidiaries. Journal of International Management, 23 (3). pp. 255-269. ISSN 1075-4253

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Abstract

Integrating distance research with the behavioral strategy literature on MNC headquarters-subsidiary relations, this paper explores how the distance between headquarters and subsidiaries relates to value added by the headquarters. We show for 124 manufacturing subsidiaries in Europe that, on average, distance is unrelated to value added by headquarters but that this effect is contingent upon the extent to which the subsidiary is locally embedded. Only after a certain threshold level of subsidiary embeddedness, distance is negatively related to headquarters value added. This effect is more pronounced for cultural, economic, and administrative distances than for pure geographic distance, highlighting the critical role of contextual variation for MNCs.

Item Type: Article
Additional Information: To see the final version of this paper please visit the publisher's website. Access to the published version requires a subscription. The original publication is available at http://www.elsevier.com. http://dx.doi.org/10.1016/j.intman.2017.03.002.
Keywords: Multinational corporations; Distance; Headquarters-subsidiary relationships; Headquarters value added; Subsidiary embeddedness; Behavioral approach
Divisions: Departments > Welthandel > International Business > Nell
Version of the Document: Accepted for Publication
Depositing User: Gertraud Novotny
Date Deposited: 01 Dec 2017 12:50
Last Modified: 01 Dec 2017 12:56
Related URLs:
FIDES Link: https://bach.wu.ac.at/d/research/results/81561/
URI: http://epub.wu.ac.at/id/eprint/5892

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