Reputational Spillovers Among MNE Subunits: The Tension Between Categorical and Institutional Logics

Abstract

Applying reputation theories to the MNE, we theorize reputational spillovers among MNE subunits as originating in the tension between categorical and institutional logics. We test the theory based on a sample of non-US MNEs that listed in the US, employing listing as the reputation-generating activity. We find that listing affects reputation of US subunits and that of the MNE globally at varying magnitudes and time-spans. The relationships are contingent upon the similarity between the names of the MNE and US subunits and the diversity of their audiences. The study extends the theorization of assets’ sharing and spillovers among MNE subunits to reputation, an asset that received limited research attention in spite of its critical impact on MNE performance in foreign countries and globally. It also advances reputation theory by studying reputational spillovers among geographically-separated entities connected by ownership and shared nationality.