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

Sjoerd Beugelsdijk*, Phillip C. Nell, Björn Ambos

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    Resumé

    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.
    OriginalsprogEngelsk
    TidsskriftJournal of International Management
    Vol/bind23
    Udgave nummer3
    Sider (fra-til)255-267
    Antal sider13
    ISSN1075-4253
    DOI
    StatusUdgivet - sep. 2017

    Bibliografisk note

    Published online: 3. April 2017

    Emneord

    • Multinational corporations
    • Distance
    • Headquarters-subsidiary relationships
    • Headquarters value added
    • Subsidiary embeddedness
    • Behavioral approach

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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.",
    keywords = "Multinational corporations, Distance, Headquarters-subsidiary relationships, Headquarters value added, Subsidiary embeddedness, Behavioral approach, Multinational corporations, Distance, Headquarters-subsidiary relationships, Headquarters value added, Subsidiary embeddedness, Behavioral approach",
    author = "Sjoerd Beugelsdijk and Nell, {Phillip C.} and Bj{\"o}rn Ambos",
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    When Do Distance Effects Become Empirically Observable? An Investigation in the Context of Headquarters Value Creation for Subsidiaries. / Beugelsdijk, Sjoerd; Nell, Phillip C.; Ambos, Björn.

    I: Journal of International Management, Bind 23, Nr. 3, 09.2017, s. 255-267.

    Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

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