Cross-national distance and insidership within networks: Japanese MNCs' ownership strategies in their overseas subsidiaries

Abstract

This study investigates the controversial question about how cross-national distance influences MNCs' equity ownership in their overseas subsidiaries. Prior studies adopted aggregated constructs and time-invariant measures of cross-national distance, failing to capture the complexity of the phenomenon. Moreover, although ‘insidership’ within business networks may moderate the foreignness that MNCs confront in overseas markets, prior studies have not incorporated it into analysis. The present study confirms the explanatory power of multiple dimensions of cross-national distance and MNCs' insidership within networks. It also shows that cross-national distance and insidership within relevant works strengthen or weaken each other's influences on Japanese ownership strategies.