Phasing the operation mode of foreign subsidiaries: Reaping the benefits of multinationality through internal capital markets

The lifetime of foreign equity partnerships is often limited. Research suggests that MNCs abandon their local partners when the need for sharing ownership in foreign subsidiaries has diminished. This study shows that MNCs may abandon their local equity partners to reap the benefits of multinationality: as MNCs gain a competitive advantage from leveraging resources across borders, they will initially benefit from sharing ownership with a local...