a note on foreigners trading and price effects across firms abstract we study the investment behavior of foreign investors in association with an equity market liberalization and find a strong link between foreigners trading and local market returns in the period following the liberalization net purchases by foreign investors induced a permanent increase in stock prices suggesting that local firms reduced their cost of equity capital we also find a strong link between a firm s fraction of foreign ownership and the magnitude of the cost reduction foreign investors seem to prefer large and well known firms and these firms realize the largest reduction in capital cost furthermore our analysis suggests that foreigners increase their net holding in firms that have recently performed well analyzing foreigners performance we find very little evidence of informed trading suggesting that risk sharing is the most plausible explanation for the reduction of the cost of equity capital

some aspects of the taxation of capital gains abstract the analysis of the effects of capital gains taxation requires a careful modelling both of the details of the tax code and the imperfections in the capital market under the standard assumptions concerning perfect capital markets and under the standard idealizations of the tax code there are several strategies by which rational investors can avoid note only all taxes on their capital income but also all taxes on their wage income these strategies leave individuals consumption and bequests in each state of nature and at each date unchanged from what they would have been in the absence of taxes although certain detailed provisions of the tax code may limit the extent to which rational investors can avail themselves of these tax avoidance activities there are ways in a perfect capital market by which the effects of these restrictions can be ameliorated accordingly any analysis of the effects of capital taxation must focus on imperfect capital markets if individuals face limitations on the amounts which they can borrow and or if there are limitations on short sales then under some circumstances there is a locked in effect individuals do not sell securities which they would have sold in the absence of taxation but under other circumstances individuals are induced to sell securities that they otherwise would have held in order to take advantage of the asymmetric treatment of short term losses and long term gains a policy of realizing gains as soon as they become eligible for long term treatment dominates the policy of postponing the realization of capital gains provided the gains are not too large a simple general equilibrium model is constructed within which it is shown that the taxation of capital gains may increase the volatility of asset prices and lead individuals not to trade when they otherwise would while the analysis casts doubt on the significance of the welfare losses resulting from these exchange inefficiencies there are circumstances in which the tax leads to production inefficiencies e g terminating projects at other than the socially optimal date finally we argue that the focus of some recent policy debates on the short run revenue impact of a decrease in the tax rate on capital gains is misplaced even when the short run revenue impact is positive consumption may increase thus exacerbating inflationary pressures and private savings may decrease thus leading to a lower level of investment in the private sector moreover there is some presumption that the long run revenue impact is negative our analysis has some important implications for empirical research in particular it suggests that the impact of the tax is not adequately summarized by a single number such as the effective tax rate representing the average ratio of tax payments to capital gains moreover the impact of the tax cannot be assessed by looking only at reported capital gains and losses

towards an attention based view of the firm the central argument is that firm behavior is the result of how firms channel and distribute the attention of their decision makers what decision makers do depends on what issues and answers they focus their attention on what issues and answers they focus on depends on the specific situation and on how the firm s rules resources and relationships distribute various issues answers and decision makers into specific communications and procedures the paper develops these theoretical principles into a model of firm behavior and presents its implications for explaining firm behavior and adaptation 1997 by john wiley sons ltd

what are the consequences of initiative taking in multinational subsidiaries the phenomenon of subsidiary initiative has received increasing attention in recent years but the consequences of initiatives and the associated dynamics of headquarters subsidiary relationships have received much less research attention building on resource dependence theory and self determination theory we argue that two basic goals subsidiary managers pursue are to achieve autonomy vis a vis corporate headquarters and influence over other units we investigate how a subsidiary s past initiatives contribute to its bargaining power and how headquarters response through granting attention or monitoring affects the realization of the subsidiary s goals using structural equation modeling our hypotheses are tested by drawing on a sample of 257 subsidiaries located in three different countries australia canada and the united kingdom our results show that subsidiaries are not able to increase their influence through initiatives unless they get headquarters attention we also find that subsidiary initiatives have a direct effect on subsidiary autonomy but the caveat is that initiatives also evoke headquarters monitoring which in turn decreases the subsidiary s autonomy in addition to providing insights into how subsidiaries can achieve their goals the paper also sheds light on the critical role headquarters plays in leveraging initiatives and the influence of individual subsidiaries in the multinational enterprise

peer conformity attention and heterogeneous implementation of practices in mnes how do subsidiaries respond to normative demands from both their headquarters and local external constituents we propose that subsidiaries pay varying levels of attention to demands depending on their peers norm conforming behavior resulting in heterogeneous practice implementation we study the implementation of 25 practices associated with three corporate social responsibility csr issues in 101 worldwide subsidiaries of a multinational enterprise mne consistent with the idea that attention is limited and therefore selective we find that external peers conformity to the csr norm directs subsidiaries attention toward the csr related demands of external constituents at the expense of the demands from the headquarters however internal peers conformity increases attention to both external and headquarters demands related to csr as higher attention levels result in higher practice implementation internal and external peers conformity drives the heterogeneity of practice implementation in the mne our results suggest the need to rethink the influence of peers conformity on subsidiaries implementation of practices as it not only triggers mimicry based on legitimacy but also and simultaneously a more strategic response based on internal and external competitive threats and attention allocation

environmental influences on mne subsidiary roles economic integration and the nordic countries we seek to examine the importance of environmental factors in determining mne subsidiary roles in particular we examine the environmental factors associated with deep integration schemes such as the eu such schemes require a convergence of economic structure due to the establishment of common regional institutions regulations and policies specifically we distinguish between the scope of activities performed by subsidiaries and the level of competence of those subsidiaries the empirical analysis is based on a large scale survey of foreign owned units in denmark finland and norway these nordic countries differ with regard to their eu membership status norway being the outsider while the others are members but are very similar to each other in most other respects our data show that subsidiaries in norway report significantly lower scores for both scope of activities and levels of competence the effects remain strong even when we are controlling for other potentially influential factors the findings indicate that being on the outside of the eu may indeed carry the price of becoming less attractive to mne activity

the scope and limits of financial liberalisation in developing countries a critical survey this article reviews the growing literature on financial reform in developing countries we draw both on the theoretical contributions outlining the case for and against liberalisation as well as on the experience of many developing countries with liberalisation we argue that the existence of market failures in financial markets hampers the liberalisation process and indeed suggests that the simple liberalising strategy envisaged in much of the literature is inappropriate we argue instead for an alternative strategy which integrates some aspects of liberalisation with the development of appropriate financial institutions designed to serve best the needs of the real economy

the swedish banking crisis roots and consequences the article analyses the swedish banking crisis in the early 1990s newly deregulated credit markets after 1985 stimulated a competitive process between financial institutions where expansion was given priority combined with an expansive macro policy this contributed to an asset price boom the subsequent crisis resulted from a highly leveraged private sector being simultaneously hit by three major exogenous events a shift in monetary policy with an increase in pre tax interest rates a tax reform that increased after tax interest rates and the erm crisis combined with some overinvestment in commercial property high real interest rates contributed to breaking the boom in real estate prices and triggering a downward price spiral resulting in bankruptcies and massive credit losses the government rescued the banking system by issuing a general guarantee of bank obligations the total direct cost to the taxpayer of the salvage has been estimated at around 2 per cent of gdp copyright 1999 by oxford university press

explaining stakeholder evaluations of hrm capabilities in mnc subsidiaries this paper examines how functional and line management stakeholders evaluate operational human resource management capabilities in multinational corporation mnc subsidiaries we suggest that such evaluations are a function of two key structural factors 1 that focal subsidiary human resource hr departments respond differentially to the expectations of differently located stakeholders and 2 that the structural position of the stakeholder determines what cues he or she relies upon to construct the evaluation our findings show that the focal hr subsidiary department is likely to exert more effort towards meeting the expectations of line management stakeholders and we suggest that this is a function of line management s co location with the focal hr department second we find that co located line management stakeholders are more likely to rely on experience based cues when constructing evaluations whereas headquarters located functional stakeholders tend to rely on cognition based evaluation driven by their ability to compare across different subsidiary hr departments we contribute to the literature by going beyond existing research that has tended to focus on evaluation from the perspective of organizational behavior by providing a structural perspective on capability evaluation in mncs that combines the insights of role theory and cognitive choice heuristics

autonomy and procedural justice a framework for evaluating subsidiary strategy using the well supported dimensions of autonomy and procedural justice a four quadrant model of subsidiary strategy is proposed and a four part typology hypothesized partner collaborator militant and vassal subsidiaries a clustering process is used to develop a four group taxonomy that corresponds with the induced model the four groups of subsidiaries are analysed across seven alternative strategic dimensions integration responsiveness coordination configuration market scope product scope and value added scope the external and internal validity of the framework is confirmed and its utility discussed in terms of subsidiary s movement from one strategy state to another

a role based ecology of technological change this article considers what factors determine whether an innovation becomes a foundation for future technological developments rather than a dea end the authors introduce the concept of the technological niche which includes a focal innovation the innovations on which the focal innovations builds the innovations that build upon the focal innovation and the technological ties among the innovations within the niche using patents and patent citations to measure characteristics of innovation niches within the semiconductor industry the authors show that the size of the niche and the status of the actors within the niche have a positive effect on the likelihood that subsequent innovations will build upon the focal innovation competitive intensity within the niche has a negative effect on this likelihood

managing the mne subsidiary advancing a multi level and dynamic research agenda abstract multinational enterprise mne subsidiaries abroad are important organizations in their own rights they typically hold some of the mne s most critical resources and operate at the forefront of complex international environments in this review we identify and organize theoretical and empirical research on subsidiary management based on over 600 articles in leading academic journals we develop a conceptual framework that integrates complementary streams of theoretical and empirical research with the subsidiary as its focal unit of analysis in particular we review six lines of research on subsidiary scope practices knowledge management engagement with local market and nonmarket actors performance and individuals within subsidiaries we highlight theoretical perspectives that have contributed to and been advanced by research on mne subsidiaries based on the review we explore future research agendas linking the contemporary research themes with two main thrusts first subsidiary management is a multi level phenomenon that would benefit from more microfoundational research second subsidiary management operates at key interfaces of technology paradigm shifts and of disruptions in the political and institutional environment research into the dynamics of subsidiary management would thus enhance our understanding of international business in a volatile global economy

the information in swedish short maturity forward rates in this paper we empirically study the relationship between implicit forward rates and corresponding interest rates in the short end of the swedish term structure the interest rates and forward ra

autonomy delegation to foreign subsidiaries an enabling mechanism for emerging market multinationals current theory on foreign subsidiary autonomy is insufficient to examine a situation where a multinational lacks experience to organize global operations and yet intends to compete extensively with established multinational enterprises mnes from advanced economies by building on theoretical perspectives developed for emerging market multinational enterprises emnes we advance the idea that foreign subsidiary autonomy is a strategic mechanism to overcome the emne s weaknesses in managing globally dispersed businesses and their home country disadvantages after foreign entry subsidiary autonomy delegation assists in performing the learning functions necessary for overcoming resource and capability voids as well as for distancing the subsidiary administratively from the parent s negative home country institutional heritage analyses of survey data collected from headquarter senior executives of 240 chinese mnes suggest that subsidiary autonomy delegation is higher among firms relying on foreign markets as a springboard to acquire strategic assets whose top managers at the headquarters perceive high domestic institutional constraints and which do not count on government assistance to expand internationally further we demonstrate that these relationships are strengthened with greater inward foreign direct investment cooperative experience and with the use of merger and acquisition entry modes these findings have important implications for theories on subsidiary autonomy

when competitive advantage doesn t lead to performance the resource based view and stakeholder bargaining power what if rent from a competitive advantage is appropriated so it cannot be observed in performance measures the resourcebased view was not formulated to examine who will get the rent yet this essay argues that the factors leading to a resource based advantage also predict who will appropriate rent knowledge based assets are promising because firm specificity social complexity and causal ambiguity make them hard to imit ate however the roles of internal stakeholders may grant them a great deal of bargaining power especially relative to investors this essay integrates the resource based view with the bargaining power literature by defining the firm as a nexus of contracts this new lens can help to explain when rent will be generated and simultaneously who will appropriate it in doing so it provides a more robust theory of firm performance than the resource based view alone it is also suggested that this lens might be useful for examining other theories of firm performance

global strategy implementation at the business unit level operational capabilities and administrative mechanisms the study examines the impact of internationally strategy on organizational design and the influence of the organizational design on effectiveness at the business unit level the empirical findings are based on survey responses from eighty two business units competing in global industries the findings are supportive of the contingency notion which suggests that business unit effectiveness is a function of the fit between the international strategy and the organizational design

managing foreign subsidiaries agents of headquarters or an interdependent network in this study two different theoretical perspectives are used to develop sets of hypotheses regarding the mechanisms used to manage foreign subsidiaries of multinational corporations first agency theory serves as the basis for a model that predicts the use of monitoring mechanisms and incentive compensation then it is argued that these mechanisms are insufficient for managing subsidiaries characterized by high levels of intra firm international interdependence the management of which is critical to many of today s complex global firms a second set of hypotheses is argued linking international interdependence to several social control mechanisms primary and secondary data from u s based multinational corporations were used to test both sets of hypotheses the results indicate that agency theory although a useful foundation for studies of control within mncs is limited in its ability to explain fully the phenomenon of foreign subsidiary control however the model based on intra firm interdependence had much greater predictive ability copyright 2000 john wiley sons ltd

the capitalization of interest subsidies evidence from sweden we analyze by far the most extensive database yet employed in estimating capitalization of below market interest rates into asset prices nearly 300 000 sales of owner occupied homes in sweden from 1981 to 1993 with 27 000 including government subsidized interest rates our estimates indicate very clearly that interest subsidies are capitalized into house prices the below market financing parameter is consistently significant in all model specifications irrespective of assumptions about the degree of foresight representation of the age structure and interest rate measure for all ten regions that we have studied in our favored model specification the estimated capitalization coefficients center on unity indicating full capitalization of after tax interest rate subsidies

household savings and debts the experience of the nordic countries the paper discusses the development of savings and household debt in the nordic countries during the last two decades the main conclusion is that the timing of political reforms in the 1980s and 1990s was fundamental for the development of consumption and household savings in general financial deregulation took place before tax reforms and lifting of foreign exchange controls the wrong timing of these reforms resulted in households accumulating high debt burdens which in turn led to a deep and longer recession or process of debt deflation than might otherwise have occurred copyright 1994 by oxford university press

the evolution of intracorporate domains divisional charter losses in high technology multidivisional corporations modern corporations have become synonymous with the multidivisional form of organization variously interdependent divisions are chartered to look after one or more business areas in effect defining the turf of the division and its purpose within the corporation and collectively defining the corporate domain however once created these divisional charters should not be regarded as rigid they are susceptible to change particularly in fast paced environments such as in high technology industries divisional charters are liable to change as divisions add or subtract businesses to their charter responsibilities these charter changes are seen as an adaptive device for large multidivisional corporations in fast paced environments this paper presents a process model of how divisions change their domains in hypercompetitive contexts focusing on the specific question of how divisions lose all or portions of their business charters the paper is based on a larger inductive study of charter changes in

implementing global strategy characteristics of global subsidiary mandates implementing a global strategy requires coordinating subsidiary activities across country locations the assumption often made is that such coordination must be managed at headquarters however an alternate approach is decentralized centralized responsibilities in which different subsidiaries within the multinational are given worldwide mandates to manage specific products or products lines this study identifies subsidiary characteristics that are associated with receiving a global mandate by examining foreign subsidiaries located in france germany japan u k u s and canada

financial innovation the last twenty years and the next the word revolution is entirely appropriate for describing the changes in financial institu tions and instruments that have occurred in the past twenty years the major impulses to successful financial innovations have come from regulations and taxes the outlook for the future is for a slowing down of the rate of financial innovation but much growth and improvement are still in prospect

stability vs flexibility the effect of regulatory institutions on opportunity type how entrepreneurial opportunities are formed and exploited depends upon the institutional environment in which they are embedded the varying amounts of risk and uncertainty across and within heterogeneous institutional environments have important implications for the types of opportunity developed while the international business and entrepreneurship literatures consider the effect of environmental risk and uncertainty on firms risk and uncertainty are often treated as interchangeable or synonymous and rarely are both considered to be present together to address this we develop a new theoretical model based on institutional economics describing how institutional arrangements promoting stability thus supporting an entrepreneur s ability to assess risk will lead to more imitative opportunities while institutions promoting flexibility thus supporting an entrepreneur s ability to respond to uncertainty by iterating will foster more innovative opportunities we test this framework using cross national data across 40 countries from the gem survey finding that institutional arrangements that promote stability do lead to more imitation while institutions that promote flexibility foster more innovation by treating risk and uncertainty as distinct constructs our study makes theoretical contributions to research on institutional environments and opportunity types with implications for future research on subsidiary initiatives the evolution of mnes and born global firms

host country environment and subsidiary competence extending the diamond network model we extend the centers of excellence concept to address the diversity and multidimensionality of subsidiary competence using rugman and verbeke s diamond network model we hypothesize the contingencies influencing the links between host country environments and subsidiary competence configuration and provide evidence from more than 2000 subsidiaries in seven european countries our results provide new insights into how multinational enterprises can overcome unbalanced national diamonds by acquiring complementary capabilities across borders

managing interrelated tensions in headquarters subsidiary relationships the case of a multinational hybrid organization while all multinational organizations face the challenge of managing tensions between local integration and global responsiveness they are increasingly required to pursue additional often paradoxical objectives such as social and commercial goals however we know little about how these tensions at the core of the mnc strategy interact based on an inductive qualitative study of four headquarters subsidiary relationships in a latin american multinational hybrid organization we develop a model showing the interplay of multiple tensions and management approaches to address them this allows us to contribute to research on subsidiary roles which we found to differ depending on how multiple tensions are addressed furthermore we add to the literature on hybridity in multinational organizations by pointing out how regional differences between units of a single organization unfold finally we provide some practical recommendations for the management of multinational hybrid organizations

does financial deregulation cause a consumption boom according to a growing number of critics the process of financial liberalisation in the 1980s is to blame for the volatile macroeconomic development in a number of countries including the u k and the nordic economies we examine how financial deregulation affected one important component of aggregate demand private consumption a main finding is that the swedish consumption boom of the late 1980s can be explained along other lines than financial deregulation the mid 1980s also constituted a period when real wage growth picked up and our data are consistent with the simple idea that permanent income dynamics was an important factor

unemployment in open economies the impact of trade finance and european integration this article compares variations in the level of unemployment in four small open economies austria belgium the netherlands and sweden rather than focusing on the political institutional differences between these four countries the article examines international economic variables such as the role of the european monetary system the structure of foreign trade and linkages to international markets to understand the greater deterioration of employment in belgium and the netherlands in turn the decision to join the european community and to seek firmer integration into financial markets is attributed to the relatively greater influence of banking capital or the financial sector in the systems of economic policy making of belgium and the netherlands the article concludes that the detachment of the austrian and swedish economies from the european experience in economic integration has greatly helped the social democrats in these countries in fulfilling their promises of full employment

is knowledge power knowledge flows subsidiary power and rent seeking within mncs in recent years as multinational corporation mnc subsidiaries have become more closely linked to international networks their knowledge intensity has risen and some of their r d has gained a more creative role simultaneously and often connectedly many subsidiaries have acquired considerable strategic independence in all aspects of their operations and therefore are able to exercise considerable intra firm bargaining power to influence the distribution of the firm s resources in this context we suggest that intra mnc knowledge flows are a key determinant of subsidiary bargaining power we argue that subsidiary managers can exploit such power to pursue their own ends such rent seeking behavior is implicit in much of the literature on managerialism but our analysis suggests that such behavior can now occur in headquarters subsidiary and subsidiary subsidiary relations thus subsidiary strategic independence designed to enhance the competitiveness of outputs market knowledge and inputs asset seeking and learning can be corroded when the pursuit of subsidiary objectives encourages rent seeking empirical analysis of a sample of high technology subsidiaries in the uk provides strong support for the theory we examine several avenues whereby the incentives of units within the mnc can be aligned

host country corruption and the organization of hq subsidiary relationships multinational enterprises mnes operating in more corrupt host than home countries face actual costs related to processing information for decision making and lack of local legitimacy and potential reputation and legal costs in case of corruption scandals drawing on the organizational perspective of corruption we argue that greater subsidiary autonomy helps minimize these costs however headquarter hq subsidiary communication weakens the autonomy based advantages for minimizing legitimacy costs and mnes experience in relatively corrupt countries weakens the advantages for minimizing information processing costs our analysis of 261 italian foreign subsidiaries in 25 host countries confirms most of our arguments except the moderating effect of mne experience our findings contribute to research on corruption and fdi weak institutional contexts and mne strategies as well as the literature on hq subsidiary relationship

balancing subsidiary influence in the federative mnc a business network view the contest for intra organisational power in the multinational corporation mnc has gradually become a prominent issue on the research agenda as long as 25 years ago hedlund 1980 investigated the strategic roles of subsidiaries in mncs and doz and prahalad 1981 raised the issue of how difficult it is for headquarters to remain in control of its subsidiaries and to influence their strategies over time since then several researchers have suggested that mncs can be considered to be dispersed structures of power in which the top management s authority does not necessarily result in hierarchical power being the ultimate control mechanism hedlund 1986 forsgren 1989 ghoshal and bartlett 1990 doz and prahalad 1993 ferner and edwards 1995 kristensen and zeitlin 2001 morgan and whitley 2003 birkinshaw and hood 1998 examined the evolution of capabilities at the subsidiary level and recognised that in most corporations there is an internal competition for charter that implies a process of change in subsidiary roles birkinshaw and hood 1998 782 case research has also indicated that changes in the charters of divisions or subsidiaries in mncs constitute a strong feature of horizontal or vertical competition in the corporate marketplace galunic and eisenhardt 1996 birkinshaw and fry 1998 the tension between the headquarters and overseas laboratories caused by the laboratories desire for autonomy and influence is an example of such a competition asaka wa 2001

wait and see strategy risk management in the internationalization process model we interpret the wait and see strategy as a decision to maintain unchanged the firm s commitments to its business network relationships to explain why firms choose a wait and see strategy we propose an extension to the relationship commitment decisions aspect of the uppsala internationalization process ip model with this development we explain that the wait and see strategy can result from a change in the levels of risk assumed in the firm and not only from the decision to adjust the risk that the firm encounters by changing commitments to its network relationships this development enhances the ability of the ip model to accommodate contextual influences on relationship commitment decisions and to explain a more complete suite of internationalization trajectories extending the theoretical core of the ip model further confirms its efficacy its application to international strategy and its potential to be developed as a general process model of strategic change

interview with robert a mundell robert a mundell has been professor of economics at columbia university in new york city new york since 1974 and university professor since 2001 in 1999 he was awarded the nobel memorial prize in economic science for his analysis of monetary and fiscal policy under different exchange rate regimes and his analysis of optimum currency areas we interviewed professor mundell at his hotel in boston massachusetts on january 7 2006 while attending the annual meeting of the allied social science associations

social housing finance in sweden sweden historically had a highly subsidised housing construction and rehabilitation subsidies were mainly channelled through an interest subsidy system which reduced initial capital expenditures a boom in the housing market in the late 1980s turned into a bust in the early 1990s this was due to a combination of factors a lower inflation rate a deep economic recession and reduced interest subsidies in combination with a tax reform the effect was to create a large price fall vacancies a low construction rate and large defaults the bank crisis was counteracted by a tighter credit market with a more thorough screening of borrowers municipal housing companies lost their protected position on the credit market in the early 1990s many of the companies were severely hurt by an increasing number of vacancies and had an insufficient safeguard in terms of a low equity it is thus anticipated that municipal housing companies will be an important target for bank screening in the future and it is antic

extending the internationalization process model increases and decreases of mne commitment in emerging economies the internationalization process model suggests that firms internationalize by building positions in foreign markets and networks following iterative cycles of learning and changes in commitment however as subsidiaries evolve commitments may be decreased as well as increased a phenomenon that has rarely been studied moreover it remains an open question why strategic intentions at the outset of an investment project differ from the actual operations established we address these questions by extending the model and combining it with mintzberg and waters framework of strategy formation specifically we suggest that commitment decisions correspond to statements of intended strategy while network positions correspond to realized strategies the processes of learning opportunity creation and trust building triggered by commitment decisions are however moderated by institutional influences that lead to divergences between realized and intended strategies we test propositions derived from this framework on a survey data set of subsidiaries of multinational enterprises in hungary lithuania and poland and find that institutional voids and institutional uncertainty affect subsidiary strategy implementation but in opposing directions under high institutional uncertainty investors prefer low commitment but flexible modes that enable later commitment increases whereas institutional voids increase up front information search and adaptation costs that reduce the likelihood of early post entry adjustments our analysis reinforces the need for more differentiated theoretical analyses of how institutions affect business strategies over time

navigating identity duality in multinational subsidiaries a paradox lens on identity claims at hindustan unilever 1959 2015 multinational subsidiaries do not merely seek legitimacy within their dual institutional contexts they also strive to articulate an organizational identity by drawing on institutional resources embedded in these dual contexts we draw attention to the subsidiary s identity duality and conceptualize it as a paradox i e as the juxtaposition of the contradictory interdependent and persistent characteristics of the global and the local in the subsidiary s identity using 57 years of archival data from hindustan unilever the indian subsidiary of anglo dutch multinational unilever we observe changing patterns in the articulation of identity claims by subsidiary leaders and develop a process model of how subsidiaries navigate identity duality over time we find that subsidiary leaders may use two modes of organizational identity work for this purpose logic ordering the articulation of identity claims that respond to contradictory institutional demands by privileging one and subordinating the other and logic bridging the articulation of identity claims that respond to contradictory institutional demands by effecting a janusian integration of the said demands over time and employing these modes of identity work leaders at hindustan unilever sustained a dynamic balance between the dual cores of the subsidiary s espoused identity

the determinants of mne subsidiaries political strategies evidence of institutional duality in this study we develop and test a model of the determinants of political strategies used by foreign subsidiaries of multinational enterprises mnes using recent theoretical advances in institutional theory that recognize that mne subsidiaries are confronted with pressures for isomorphism within the corporation internal legitimacy and within the host country external legitimacy we integrate international business and political strategy literatures to create a multilevel model of subsidiary host country and parent determinants of political strategy our hypotheses are tested using survey and archival data from western european subsidiaries of us mnes

toward a model of issue selling by subsidiary managers in multinational organizations in multinational organizations local market responsiveness is critical to the development of effective strategies this responsiveness is expected to occur in part as the result of upward influence from local subsidiary managers who represent the local culture and shift relevant priorities accordingly issue selling defined as directing top management s attention to particular issues and helping them understand such issues is one important way in which subsidiary managers pursue upward influence the purpose of this paper is to help multinational organizations better facilitate and exploit potentially valuable input from local subsidiary managers to do so we propose an acculturated view of issue selling more specifically we argue that subsidiary managers socialized by different national cultures vary 1 in the extent to which their intention to sell issues is influenced by various contextual cues and 2 in their choice of selling strategies these theoretical differences suggest that local subsidiary managers from different cultures will differ in the way they approach issue selling and in turn in the way they influence the strategy making process the discussion traces the implications of this line of reasoning for future research on the influence of local subsidiary managers and more generally for research on the cultural embeddedness of the strategy process

consumption and capital market imperfections an international comparison the excess sensitivity of consumption to current income fluctuations is higher in countries where consumers borrow less low levels of consumer debt can result either from capital market imperfections or from a low demand for loans the evidence suggests that the former view is more appropriate than the latter and thus supports the hypothesis that excess sensitivity may be attributed to liquidity constraints rather than to other factors copyright 1989 by american economic association

rationality vs ignorance the role of mne headquarters in subsidiaries innovation processes it has been recognized that innovation processes in multinational enterprises mnes are largely context specific local activities carried out at the subsidiary level e g andersson forsgren holm 2007 asakawa 2001 birkinshaw hood 1998 doz prahalad 1981 ghoshal bartlett 1988 hedlund 1986 rugman verbeke 2001 as a consequence the ability of corporate headquarters hq to influence these widely dispersed processes has become a major issue in contemporary research on mnes what is the role of hq in these processes to what extent can it participate in and play an active role in specific innovation processes what are the performance implications when it gets involved these questions which have not yet established answers warrant further research in addition studies aimed at finding the answers have not yet debated the validity of alternative perspectives related to the knowledge asymmetry between the potential participants in innovation processes

centralization in headquarters subsidiary relationships research to date on centralization in mncs has produced many inconsistent findings the present study attempts to add clarity to the situation by re testing many of the existing hypotheses with data from a recent study of centralization in 50 large us uk and european mncs it examines how the degree of centralization inherent in the headquarters foreign subsidiary relationship varies in response to a variety of company wide and subsidiary level conditions the influence of company wide conditions on centralization appears to be much clearer than the influence of subsidiary level conditions the study also identifies several new contingency patterns that appear to be at work in mncs today