Local responsiveness strategy of foreign subsidiaries of Chinese multinationals: the impacts of relational-assets, market-seeking FDI, and host country institutional environments

Wei, Z. and Nguyen, Q. T. K. ORCID: https://orcid.org/0000-0003-0179-3973 (2020) Local responsiveness strategy of foreign subsidiaries of Chinese multinationals: the impacts of relational-assets, market-seeking FDI, and host country institutional environments. Asia Pacific Journal of Management, 37. pp. 661-692. ISSN 1572-9958 doi: 10.1007/s10490-019-09655-3

Abstract/Summary

We build upon the theoretical framework of firm-specific advantages (FSAs) and country-specific advantages (CSAs) to examine the determinants of the local responsiveness strategy of foreign subsidiaries of Chinese multinational enterprises (MNEs). Specifically, we focus on relational assets (R-assets is seen as a unique type of Chinese MNEs’ FSA), the market-seeking foreign direct investment (FDI) and host country institutional environments as drivers of the local responsiveness strategy. We empirically test our hypotheses using a survey data of the foreign subsidiaries of Chinese firms together with other secondary data sources. We find that both Chinese MNEs' R-assets and the market-seeking oriented FDI are positively related to subsidiaries' local responsiveness strategy in accommodating local customer needs, government policies, market conditions, and competitive intensity. Moreover, the impact of R-assets in motivating the local responsiveness strategy is stronger in a host country with a weak and underdeveloped institutional environment. While the evidence confirms the existence of the R-assets in influencing subsidiary level strategy, it also casts doubt on such relations-based firm resources in advanced host countries with highly developed institutions.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/82782
Identification Number/DOI	10.1007/s10490-019-09655-3
Refereed	Yes
Divisions	Henley Business School > International Business and Strategy
Publisher	Springer
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