• The Journal of Asian Finance, Economics and Business
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• 제7권1호
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• pp.205-215
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• 2020

The purpose of this paper is to empirically analyze the determinants of foreign subsidiary's local embeddedness because it is critically important for the subsidiary to build a variegated local network. This paper suggests that a MNC's global capability, the degree of autonomy granted by the headquarters of the multinational corporation to its foreign subsidiary, the foreign subsidiary's absorptive capacity based on local environment, and its level of localization will affect the subsidiary's local network embeddedness. The empirical analysis confirmed that when the headquarters gives the foreign subsidiary more autonomy, this has a positive effect on the local embeddedness of the foreign subsidiary and when the foreign subsidiary has a strong absorptive capacity, this has a positive correlation with the local embeddedness of the foreign subsidiary. And this paper found that when the foreign subsidiary has achieved a high level of staff localization, this foreign subsidiary will have a higher level of local embeddedness. This study identified the preceding conditions necessary for a foreign subsidiary of a multinational corporation to effectively embed itself in the local network by analyzing factors related to the multinational corporation's headquarters and subsidiaries, and thus contributes significantly to continued research on the local embeddedness of subsidiaries.

• 무역상무연구
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• 제38권
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• pp.377-408
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• 2008

Globalization of R&D activities of multinational firms is becoming important in compared with the past, because of increasing globalization of world economy. So, every country tries to attract foreign investment including R&D activities. In this paper, effects of several factors, which determine the scale of foreign subsidiary's R&D activities in local market, are analyzed. Through the review of previous literature, I found that three groups of determinant factors. The first one is the factor which is related to characteristics of local market, such as competitive situation of local market, accessability to research institutions, etc. The second group is the factor which is related to relationship between foreign subsidiary and its mother company. The dominant factors of this group are operation strategy of foreign subsidiary, competitiveness of mother firm, and equity structure of foreign subsidiary. Finally the characteristics of industry affect to the scale of foreign subsidiary's R&D activities. Among these factors, 6 factors are chosen to investigate empirically. For the empirical investigation, 107 foreign subsidiaries among KOITA(Korea Industrial Technology Association)'s list are chosen. Each subsidiary has more than 50% of foreign equity and implement R&D activities in Korea. The results show that sales volume of foreign subsidiary is dominant influencing factor in determining scale of R&D activities in Korean market. And also I found that currently established firms are implementing more R&D activities than old established firms. This is quite interesting finding. However, R&D activities of foreign subsidiary are not vitalized in Korean market. It probably means that Korean government and Korean business partners have to make effort to enhance foreign firms/ R&D activities, because it could contribute technological and economic development of Korean market.

• 국제지역연구
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• 제22권1호
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• pp.61-78
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• 2018

해외직접투자에서 자회사 운영방식은 크게 수평적 자회사와 수직적 자회사로 구분할 수 있다. 이와 같은 자회사의 운영방식은 진출국의 제도에 따라 차이를 보인다. 본 연구는 제도이론관점에서 국내 전기전자 및 자동차산업의 해외직접투자 기업을 대상으로 진출국 공식적, 비공식적 제도가 해외 자회사 운영 방식선택에 미치는 영향을 실증 분석하였다. 실증분석결과, 진출국 정치적 위험정도가 낮을수록, 문화적 차이가 클수록 수직적 자회사를 선택하는 것으로 나타났다. 반면에 진출국 부패지수가 낮을수록, 경제자유도가 높을수록 수평적 자회사를 선택하는 것으로 나타났다.

• 국제지역연구
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• 제15권1호
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• pp.425-446
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• 2011

해외자회사의 자율성이 높아지면 경영성과가 좋아질 것이라는 것은 경영자들에게는 너무나도 당연한 논리로 받아들여 왔지만 실제로 학술적인 실증분석이 이루어지지 못하였다. 또한 글로벌경영으로 경영패러다임 전환 이후 본사의 글로벌조정의 틀 속에서도 자회사의 자율성 수준과 경영성과와의 정의 상관관계가 실제로 유의적인지 밝혀진 바가 없다. 따라서 본 연구에서는 이러한 문제를 확인하기 위하여 한국에 진출한 다국적기업을 연구대상으로 하여 다국적기업 해외자회사(본 연구에서는 한국 국내자회사)의 자율성이 경영성과에 미치는 영향관계를 연구하였다. 검증 결과 자율성은 재무적 성과와 전략적 성과 모두에 유의적인 정(+)의 영향을 미치는 것으로 나타났다. 이는 해외자회사의 자율성을 제고시킬수록 자회사의 경영성과가 높아진다는 일반적인 생각을 확인해주는 결과이다. 또한 글로벌경영의 틀 안에서도, 즉 본사의 글로벌조정 속에서도 해외자회사의 자율성을 확보해주는 것이 경영성과 향상에 중요하다는 것을 시사하고 있다.

• Journal of Korea Trade
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• 제25권2호
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• pp.134-151
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• 2021

Purpose - This study empirically analyzes the impact of the internal and external network embeddedness of foreign subsidiaries and local market characteristics of the host country on the CEO selection whether or not to appoint an expatriate as the CEO of a foreign subsidiary. Design/methodology - To conduct an empirical analysis, we obtained a list of the headquarters of Korean MNCs from the Korea Chamber of Commerce and Industry. Based on the list of HQs, we identified a final list of overseas subsidiaries of Korean MNCs that have entered the world from KOTRA (Trade-Investment Promotion Agency for Korea). Then we conducted an empirical analysis based on the results of 391 questionnaires by employing logistic regression analysis. Findings - The results of empirical analysis are as follows. First, the higher the subsidiary's internal network embeddedness, the higher the tendency appoint an expatriate as the CEO. Second, the higher the volatility of the local market, the higher the tendency to appoint an expatriate as the CEO. Third, the stronger the competition in the local market, the lower the tendency to appoint a PCN. Originality/value - This study has significant theoretical implications in that it examines the link between the internal and external embeddedness of overseas subsidiaries and the appointment of parent country nationals (PCNs) as the CEO that prior research has not examined.

• 동아시아경상학회지
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• 제6권4호
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• pp.1-12
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• 2018

Purpose - This paper tests the effect of the structure of manufacturing and marketing subsidiary network on FX exposure of Korean MNEs. Furthermore, the moderating effect of pass-through ability on the relationship between the subsidiary network and FX exposure is explored. Research design and methodology - This study utilizes a sample of 309 Korean MNEs constructed from database offered by KOTRA and KIS-VALUE. Results - As operational flexibility arising from having operations in multiple locations provides an option for firms to tackle FX exposure, greater breadth of manufacturing subsidiary network reduces FX exposure, and greater depth increases FX exposure. However, both the breadth and depth of marketing subsidiary network decrease FX exposure due to the firm's higher level of market presence and knowledge to devise an appropriate marketing strategy that can buffer adverse exchange rate movement. Such an effect is intensified when MNE's have FX exposure pass-through ability stemming from differentiated good. Conclusions - Empirical findings suggest that types and structure of Korean MNEs' foreign subsidiary network are closely related to the level of FX exposure they are experiencing. Also, they can utilize marketing subsidiary network more efficiently when having a higher R&D intensity.

• 통상정보연구
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• 제11권1호
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• pp.485-515
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• 2009

In this study aims to research and analyze what are decision factors between a wholly-owned subsidiary and a international company cooperation in the internationalization process. From 57 primary studies found 26 observed variables for aggregation of effect size in the using "Fixed Effect Model" on this mata-analysis. The article also links the theories that are used in the literature, not considered in the most of primary studies, to the empirical results and recommends global management strategy which is needed for business practical affairs. According to the result, the meta-analysis suggests that the number of employees of a MNC, the geological and cultural differneces between the host country and home country, the country-specific international experience of the MNC and export intensity, the international product diversification, the market growth and the market size of the foreign operations, and resource intensity of the foreign operations, the legal restrictions in the host country and the country risk of the home country do exert a significant effect on the decision between cooperative arrangement and a wholly-owned subsidiary. Conversely, for a large number of variables, no significant relationship seems to exist based on the combined results. This is the case, for example, for factor specificity, the r&d-intensity, the subsidiary size, the assets of the MNC and the sales volume of the MNC.

• 유통과학연구
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• 제13권8호
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• pp.15-25
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• 2015

Purpose - There is a lack of research on how much corporate control is sufficient for effective subsidiary business-related decision making. To address this research gap, this study analyzes the impact of the level of control of a Korean corporation's headquarters on its overseas subsidiary performance. Research design, data, methodology - The study's sample comes from the Overseas Korean Business Directory of KOTRA. A multiple regression analysis empirically confirmed the relationship between the headquarters level of control over the subsidiaries and their performance. Results - The results show that the greater an organization's headquarters control over strategic issues, the greater the subsidiary's non-financial performance. However, quick decision-making through decentralization promotes the rapid selection of successful new products that can provide a competitive advantage. Conclusion - This study shows that the impact of control levels on subsidiary performance depends on the type of control involved. Specifically, while low levels of control over operational issues had a positive (+) influence on subsidiary non-financial performance, high control levels led to improved non-financial performance with regard to strategic issues among the subsidiaries.

• 통상정보연구
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• 제15권1호
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• pp.227-256
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• 2013

다국적기업의 자회사에 대한 기존 분류법은 두 가지 측면에서 한계점을 가지고 있다. 첫째, 많은 연구가 이분법적 차원에서 자회사의 유형을 분류하였지만 이분법적 분류체계로는 다국적기업 내에 존재하는 다양한 자회사의 유형을 분류하기 어렵다. 다차원적 분류법이 존재하지 않고서는 자회사의 유형을 완전히 파악하는데 한계가 있기 때문이다. 둘째, 다국적기업의 자회사는 가치사슬측면에서 각각 상이한 활동을 수행하기 때문에 하나의 가치활동을 기준으로 자회사로 규정하기 어렵다. 결과적으로 자회사 유형에 대한 연구는 아직도 진행 중이며 명료하게 분류하기가 어려운 연구주제이다. 이러한 관점에서 본 연구는 해외자회사에 관한 기존의 분류모형에서 발견되는 한계를 극복하기 위해, 다차원적 기준을 고려한 분류모형을 개발하는데 그 목적이 있다. 본 연구는 해외자회사를 분류하기 위한 기준으로 (1) 요구되는 가치활동의 수 (2) 자회사의 자체조달능력과 자율성 (3) 글로벌 지향성이라는 세 가지 기준을 도입하여 8가지 유형의 자회사를 분류하였다. 그리고 이들 8가지 유형의 해외 자회사에 적합한 한국기업의 사례를 분석함으로써 본 분류유형의 타당성에 대해 논의하였다.

• Journal of Korea Trade
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• 제25권1호
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• pp.184-202
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• 2021

Purpose - This study empirically investigates the relationship between expatriate CEOs of multinational corporation (MNC) foreign subsidiaries and local philanthropy. Since corporate social responsibility (CSR) enables MNCs to achieve local legitimacy, this research argues that local philanthropy is a valuable strategic means for expatriate CEOs of foreign subsidiaries to secure local legitimacy. Design/methodology - To investigate our argument, we use a sample of 5,459 observations from 576 foreign subsidiaries of MNCs in Korea between 2002 and 2016. We conduct a random-effects panel Tobit regression with subsidiary CEO having foreign nationality as the independent variable and local philanthropy as the dependent variable. Findings - Our main findings are that expatriate CEOs of foreign subsidiaries are more actively engaged in local philanthropy. In addition, the positive relationship between expatriate CEOs and local philanthropy is weaker as their tenure increases. Originality/value - How expatriate CEOs overcome their weak local legitimacy as foreigners in a host country has remained unclear because existing studies mainly focused on the control and coordination aspects of staffing expatriates in CEO positions of foreign subsidiaries. This study broadens the literature on subsidiary CEO staffing and CSR activities of MNCs by identifying complementary relationships between expatriate CEOs and corporate philanthropy in the host country.