When Do Foreign Subsidiaries Outperform Local Compatriots? (WITHDRAWN)

Abstract

This study adopts a dual embeddedness perspective to explore when foreign subsidiaries outperform local compatriots by evaluating the relationship among parent-subsidiary embeddedness (i.e. corporate embeddedness and local embeddedness), subsidiary- specific contingency factors (i.e. business group affiliation and local dispersion), and subsidiary performance in an emerging economy. Our analysis of 1047 subsidiaries indicates that foreign subsidiaries outperform local compatriots when they have higher level of corporate embeddedness and local embeddedness. Specifically, we further propose that these efforts are contingent on subsidiary's business group affiliation and local dispersion. Our findings highlight the importance of parent-subsidiary embeddedness and subsidiary-specific contingency factors in subsidiary performance enhancement.