Performance of Chinese foreign subsidiaries: the role of national distance, organizational learning and overseas Chinese networks

Abstract

PurposeThe current literature lacks discussion on the effects of synergy among multiple factors at different levels on foreign subsidiary performance. The purpose of this paper is to explore the configuration of factors affecting foreign subsidiary performance.Design/methodology/approachThe methodology adopted in this paper is the fuzzy-set qualitative comparative analysis (fsQCA). The data are obtained from 125 foreign subsidiaries of Chinese MNCs through questionnaire surveys and secondary data.FindingsThe research results reveal that five configurations of antecedent conditions predict high foreign subsidiary performance, and the other two configurations predict not-high performance.Research limitations/implicationsThis paper’s main limitation is its only focus on foreign subsidiaries of Chinese MNCs, which means that the findings should be generalized with precaution. The most valuable implication is to identify the configurations that lead to high and not-high foreign subsidiary performance.Practical implicationsThis paper addresses the question of how interdependent factors at the national and corporate level are beneficial to foreign subsidiaries’ performance.Originality/valueThis study makes the following contributions to current theories: It provides (1) new insights for understanding the complex causality between antecedent conditions and foreign subsidiary performance and (2) a practical reference for the multinational operations of foreign subsidiaries.