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Leaving home: An institutional perspective on intermediary HQ relocations

Published on Sep 1, 2018in Journal of World Business 5.79
· DOI :10.1016/j.jwb.2018.08.004
Alfredo Valentino1
Estimated H-index: 1
(Libera Università Internazionale degli Studi Sociali Guido Carli),
Jan Schmitt1
Estimated H-index: 1
(WU: Vienna University of Economics and Business)
+ 1 AuthorsPhillip Christopher Nell13
Estimated H-index: 13
(WU: Vienna University of Economics and Business)
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Abstract
We investigate the effect of changing national institutions on relocations of intermediary HQs. Using a dataset of 154 cross-border relocations between the period from 2000 to 2015, we draw on the intermediary HQ's middle position within the MNC and investigate how a decrease in institutional quality in the HQ's host country and a change in institutional distance between different MNC units affect the relocation decision. Our findings advance the emergent literature on HQ relocations as well as our knowledge of intermediary HQs and the effect of changing institutions on organizational location choices. Beyond our theoretical contributions, we offer policy and managerial implications.
  • References (95)
  • Citations (3)
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References95
Newest
Published on Jun 1, 2018in Long Range Planning 3.36
Benoit Decreton4
Estimated H-index: 4
(WU: Vienna University of Economics and Business),
Phillip Christopher Nell13
Estimated H-index: 13
(University of Vienna),
Diego Stea4
Estimated H-index: 4
(CBS: Copenhagen Business School)
Abstract Headquarters of multinational corporations can be involved in their subsidiaries and help with the development and transfer of innovative ideas. However, headquarters involvement might not always be desired or needed, and it can thus be perceived as interference with local activities, potentially reducing local willingness to go the extra mile. We address the lack of knowledge about subsidiary manager behavior by answering the following question: How does headquarters involvement influe...
Published on Mar 1, 2018in Journal of World Business 5.79
Michael Carney25
Estimated H-index: 25
(Concordia University),
Saul Estrin43
Estimated H-index: 43
(LSE: London School of Economics and Political Science)
+ 1 AuthorsDaniel Shapiro28
Estimated H-index: 28
(SFU: Simon Fraser University)
Abstract We analyse the relationship between institutional systems (configurations of countries with similar institutional characteristics) and firm performance. We use a large sample of firms from understudied countries to explore whether the performance impact of these configurations is the same (“ equifinality ”), whether this holds across different measures of firm performance (“ Tversky effect ”), and whether some institutional configurations better support foreign-owned firms. We find that...
Published on Sep 1, 2018in Journal of Management 9.06
Tatiana Kostova25
Estimated H-index: 25
(USC: University of South Carolina),
Phillip Christopher Nell13
Estimated H-index: 13
(WU: Vienna University of Economics and Business),
Anne Kristin Hoenen3
Estimated H-index: 3
(WU: Vienna University of Economics and Business)
This paper proposes an agency model for headquarters-subsidiary relationships in multinational organizations with headquarters as the principal and the subsidiary as the agent. As a departure from classical agency theory, our model is developed for the unit level of analysis and considers two root causes of the agency problem—self-interest and bounded rationality. We argue that in the organizational setting, one cannot assume absolute self-interest and perfect rationality of agents (subsidiaries...
Published on Dec 1, 2017in Journal of Management Studies 5.84
Rene Belderbos30
Estimated H-index: 30
(UM: Maastricht University),
Helen S. Du1
Estimated H-index: 1
(NEOMA Business School),
Anthony Goerzen7
Estimated H-index: 7
(Queen's University)
One of the manifestations of the increasing diversity in multinational corporation (MNC) operations is the growing importance of regional headquarters (RHQs). RHQs assume an intermediary, bridging role between the corporate headquarters and local affiliates and other actors in their respective regions. They can have a coordination and control (i.e., administrative) mandate as well as an opportunity seeking (i.e., entrepreneurial) mandate. Since these mandates require RHQs to interact with variou...
Published on Dec 1, 2017in Journal of Management Studies 5.84
Eva A. Alfoldi5
Estimated H-index: 5
,
Sara L. McGaughey8
Estimated H-index: 8
,
L. Jeremy Clegg6
Estimated H-index: 6
As multinational enterprises (MNEs) increasingly disaggregate and disperse corporate headquarters (CHQ) activities, the allocation of regional management mandates (RMMs) to local operating subsidiaries is becoming more common. RMMs explicitly break with the traditional assumption of a clear separation between centralised and local decision-making. Yet we know little of how RMMs are enacted by the units involved, or how they evolve over time. Based on a case study of Unilever, we find that RMMs a...
Published on Dec 1, 2017in Journal of Management Studies 5.84
Arjen Slangen17
Estimated H-index: 17
(EUR: Erasmus University Rotterdam),
Marc Baaij7
Estimated H-index: 7
(EUR: Erasmus University Rotterdam),
Riccardo Valboni1
Estimated H-index: 1
(UU: Utrecht University)
Internationally disaggregated headquarters arise from cross-border relocations of headquarters components. To shed more light on the business consequences of such component relocations, we analyze stock market reactions to inversion initiatives, which are plans by US firms to offshore their registered seat. Combining business economics and institutional theory, we develop an explanatory framework centered on repatriation taxes on foreign income. Since inversions enable US firms to free themselve...
Published on Dec 1, 2017in Journal of Management Studies 5.84
Phillip Christopher Nell13
Estimated H-index: 13
(WU: Vienna University of Economics and Business),
Philip Kappen8
Estimated H-index: 8
(Uppsala University),
Tomi Laamanen14
Estimated H-index: 14
(HSG: University of St. Gallen)
In this paper, we provide an introduction to the Special Issue entitled ‘Divide and Rule? The Emergence and Implications of Increasingly Disaggregated and Dispersed Headquarters Activities in Contemporary Firms’. The purpose is two-fold. First, we propose a conceptualization of headquarters activities as a dynamic system in which activities can be distributed organizationally and spatially. We explicitly break with the dominant view of the prior research on ‘the headquarters’ as a single, identi...
Published on Dec 1, 2017in Management International Review 2.69
Benoit Decreton4
Estimated H-index: 4
(WU: Vienna University of Economics and Business),
Henrik Dellestrand9
Estimated H-index: 9
(Uppsala University)
+ 1 AuthorsPhillip Christopher Nell13
Estimated H-index: 13
(WU: Vienna University of Economics and Business)
We investigate “dual headquarters involvement”, i.e., corporate and divisional headquarters’ simultaneous involvement in innovation development projects hosted by subsidiaries of multibusiness firms. Drawing on selective hierarchical involvement theory and the literature on subsidiary network embeddedness, we analyze 83 innovation projects in 22 multibusiness firms and find that the number of partners in the projects, rather than subsidiary intra- and inter-divisional embeddedness acts as a driv...
Published on Dec 1, 2017in Journal of Management Studies 5.84
Perttu Kähäri2
Estimated H-index: 2
(Aalto University),
Iiris Saittakari1
Estimated H-index: 1
(Aalto University)
+ 1 AuthorsWilhelm Barner-Rasmussen12
Estimated H-index: 12
(Åbo Akademi University)
The fluidity of regional headquarters (RHQ) mandates is a core aspect of disaggregating HQ activities in MNCs. While ‘slicing' of global value chains has received attention in previous research, the parallel disaggregation of management activities has not. Our longitudinal study of 374 RHQ between 1998 and 2010 redresses this omission by asking why RHQ lose their mandates. We apply the concept of absorptive capacity and find two different explanatory mechanisms for full and partial mandate loss ...
Published on Sep 1, 2017in Journal of International Management 2.83
Sjoerd Beugelsdijk28
Estimated H-index: 28
(UG: University of Groningen),
Phillip Christopher Nell13
Estimated H-index: 13
(WU: Vienna University of Economics and Business),
Björn Ambos22
Estimated H-index: 22
(HSG: University of St. Gallen)
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 subsidiar...
Cited By3
Newest
Published on Jul 25, 2019in Sustainability 2.59
This study attempts to identify the key factors inhibiting the bribery practices of multinational enterprise (MNE) subsidiaries directed at local managers in China. During the experiment, this study employs an institutional theory, identifies primary determinants on the phenomenon, and compares the main components between old versus young subsidiaries. Data were collected through a questionnaire survey and both regression and spearman rank order correlation analyses were used as statistical tech...
Published on Oct 1, 2018in Journal of World Business 5.79
Geofry Areneke1
Estimated H-index: 1
(University of Northampton),
Danson Kimani2
Estimated H-index: 2
(University of Essex)
We draw on institutional isomorphism literature to develop a conceptual framework which uncovers how emerging market MNEs manage institutional tensions and complexity in corporate governance (CG) regulations within and across economic environments. Using a sample of 400 firm-year observations (2011–2015) from Nigeria, we show foreign directorship and cross-listing as significant avenues for governance isomorphism. MNEs employ these mechanisms to manage and reconcile foreign and Nigerian CG regul...
Published on Apr 1, 2019in Journal of World Business 5.79
Sumon Kumar Bhaumik19
Estimated H-index: 19
(University of Sheffield),
Nigel Driffield32
Estimated H-index: 32
(Warw.: University of Warwick)
+ 2 AuthorsPaul M. Vaaler17
Estimated H-index: 17
(UMN: University of Minnesota)
We explore factors of convergence and divergence in corporate governance of emerging and developed market economies, focussing on the role of firm internationalisation. In particular, foreign investments by emerging economy firms led to upgrade of their governance capabilities. These firms also became advocates for home-country policy reforms that mandated the development of similar capabilities for local firms. We present a broad overview of the literature and propose an approach that considers...
Published on Dec 1, 2018in Journal of International Business Studies 7.72
Sjoerd Beugelsdijk28
Estimated H-index: 28
(UG: University of Groningen),
Bjoern Ambos1
Estimated H-index: 1
(HSG: University of St. Gallen),
Phillip Christopher Nell13
Estimated H-index: 13
(University of Vienna)
Distance is a central concept in international business research, yet there is debate about the construct as well as its operationalization. In this editorial, we address three of the most important recurring questions posed by authors, editors, and reviewers by examining the theory, methods, and data of distance research. We discuss (1) how to theorize on distance, and (2) what method and (3) what data to use when constructing a distance index. We develop practical recommendations grounded in t...