Developing acquired foreign subsidiaries: the experience of MNES in transition economies

Abstract

Drawing on subsidiary evolution and dynamic capabilities research, I test how development and growth of subsidiaries recently acquired in transition economies are affected by multinational enterprise (MNE) and target capabilities. These subsidiaries often lack important resources; their cross-border transfer, enhancement, and exploitation are problematic, however. Data on 170 acquisitions in Central and Eastern Europe confirmed the importance of the pre-acquisition experiences of both target and MNE for subsidiary growth, although cultural differences moderated the predicted effects notably.