Exchange rate challenges, flexible intra-firm adjustments, and subsidiary longevity

Song, Sangcheol

doi:10.1016/j.jwb.2014.01.001

Cited by 39 publications

(19 citation statements)

References 67 publications

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“…Although weak firm performance has emerged in the literature as one of the main reasons that leads to a divestment of a foreign subsidiary (Song 2015), empirical evidence is inconclusive. For instance, while some exit studies have found that firms are likely to divest their poorly performing operations (Berry, 2013), other studies have found that firm performance/productivity is not an important determinant for explaining exits (Engel, Procher, & Schmidt, 2013, Soule, Swaminathan, & Tihanyi, 2014.…”

Section: Discussionmentioning

confidence: 99%

Firm-specific resources and foreign divestments via selloffs: Value is in the eye of the beholder

Konara

Ganotakis

2020

Journal of Business Research

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Section: Discussionmentioning

confidence: 99%

Firm-specific resources and foreign divestments via selloffs: Value is in the eye of the beholder

Konara

Ganotakis

2020

Journal of Business Research

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“…Whereas previous studies posit that an FA's poor performance is likely to trigger exit from the foreign market, this is an incomplete picture of foreign exit decisions (Song, ). The negative relationship between the two may become different if we take the FA's decision on the level of business relatedness between the FA and its PC's core business into consideration.…”

Section: Theoretical Background and Research Hypothesesmentioning

confidence: 91%

“…Nonetheless, while most of the literature supports the argument that firms’ exit decisions are made because of lagging profits and disappointing performance results, other factors have been found to influence firm decisions. Previous studies have established that firms exiting from a foreign market may be influenced by factors such as economic growth in the host country (e.g., Benito, ); human capital (e.g., Mata & Portugal, ); political risk (e.g., Soule, Swaminathan, & Tihanyi, ); a search for better opportunities for firm resources (Berry, ); civil violence (e.g., Hiatt & Sine, ); mode of entry (e.g., Li, ); international experience (e.g., Shaver, Mitchell, & Yeung, ); organizational image and identity (e.g., Wan et al, ); geographic concentration (e.g., Dai, Eden, & Beamish, ); investment size (e.g., Song, ); cultural distance (e.g., Pattnaik & Lee, ); top management teams’ ethical values (e.g., Nyuur, Amankwah‐Amoah, & Osabutey, in press); and size of subsidiary (e.g., Song, ).…”

Section: Theoretical Background and Research Hypothesesmentioning

confidence: 99%

“…For instance, the recent announcement by Barclays’ new chief executive to exit its African operations, Tesco's exit from the U.S. market because of the lack of profits, and the declarations by several firms that they may exit the U.K. market following the Brexit vote are just a few examples of the relevance of this issue in today's business environment. As a result, calls have followed for a much deeper understanding of the firm's exit decision and its determinants (e.g., Song, ; Wan, Chen, & Yiu, ).…”

Section: Introductionmentioning

confidence: 99%

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Performance and business relatedness as drivers of exit decision: A study of MNCs from an emerging country

Tan

Sousa

2017

Global Strategy Journal

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Research Summary This study examines the exit behavior of emerging market MNCs in the context of the parent company (PC)‐foreign affiliate (FA) relationship. Specifically, we consider business relatedness as a moderating variable and examine its impact on the relationship between an FA’s international performance and its exit decision from a foreign market. Our results, based on data collected from multiple informants in 180 Chinese firms, indicate that product relatedness and intangible resource relatedness have different moderating impacts on the FA performance‐FA exit decision relationship. Implications of these findings, along with the limitations of the study, are discussed. Managerial Summary Although the research on international entry and expansion is particularly important, an aspect that has been largely ignored in the literature is the exit behavior of firms. This study examines whether the extent to which a foreign subsidiary is similar to its parent's core business may influence the firm's exit decision. The findings indicate that managers are more likely to exit a poorly performing FA if there is a high (vs. low) level of product relatedness between the FA and its PC's core business. The results also suggest that intangible resource relatedness exerts a different contingent effect on the FA performance‐FA exit relationship than does product relatedness.

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“…The transnational merger and acquisition strategies of parent companies determined the internal control efficiency of overseas subsidiaries. Through test on Korean transnational subsidiaries, Song (2015) identified that the investment scale will influence the subsidiary business performance, because of the existence of internal capital market in enterprise groups.…”

Section: The Increase In Enterprise Equity Investment and Subsidiary Controlmentioning

confidence: 99%

Land and resources acquisition, equity investment increase and enterprise overinvestment

Yang

Liu

Li-hua

2017

NBRI

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Purpose This paper comes to the point from the tax competition of local government in investment promotion and capital introduction. This paper aims to empirically examine the internal mechanism of enterprises obtaining land resources from local government and its resulting equity investment increase and economic consequences of overinvestment. Design/methodology/approach The data of China’s A-share listed companies from 2007 to 2014 were used to test the relationship between the increase in enterprise equity investment and the acquisition of land resources and overinvestment. The descriptive statistics, correlation analysis and least squares linear regression were used to solve the above question. Findings One of the reasons for the enterprise equity increase is to obtain scarce land resources. The enterprise acquisition for land resources leads to overinvestment. The equity investment increase from obtaining land resources will further stimulate enterprise group to overinvest. Research limitations/implications The authors could not get the actual data of land that subsidiaries have obtained directly. In this research, the authors get the data using consolidated statements and subsidiary statements indirectly. Practical implications The results make contributions to the influencing factors and economic consequence of the enterprise investment structural deviation. Social implications It provides reference to optimize the “interaction” relationship between government and enterprises. Originality/value It identified the “dual-channel” conduction mechanism between land resource acquisition and enterprise overinvestment.

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Exchange rate challenges, flexible intra-firm adjustments, and subsidiary longevity

Cited by 39 publications

References 67 publications

Firm-specific resources and foreign divestments via selloffs: Value is in the eye of the beholder

Firm-specific resources and foreign divestments via selloffs: Value is in the eye of the beholder

Performance and business relatedness as drivers of exit decision: A study of MNCs from an emerging country

Land and resources acquisition, equity investment increase and enterprise overinvestment

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