Managing Uncertainty: Executive Appointments in Foreign Subsidiary Environments

Sonkova, Marketa; Karim, Samina

doi:10.5465/ambpp.2013.12722abstract

Cited by 1 publication

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“…Distinguishing between foreign firms owned by entrepreneurs and those owned by MNCs has helped us delve into this issue. Moreover, our findings on the role of immigrant CEOs inform a growing literature on managing multinational ventures, which emphasizes the benefits and costs of having foreign versus domestic managers (e.g., Kulchina 2016b;Mezias 2002;Sonkova and Karim 2013;Zhou 2014). We demonstrate that firms that have a stronger need to rely on the support of the local community (i.e., foreign new ventures) but have few formal means to engage with it need a manager of the same nationality as the community to which they relate.…”

Section: Discussionsupporting

confidence: 69%

“…Moreover, our results reveal a significant difference in the impact that immigrants have on MNC subsidiaries compared to foreign entrepreneurial ventures, thereby emphasizing the importance of considering firm heterogeneity in the immigrant-performance relationship. Second, our findings on the role of immigrant CEOs inform a rapidly growing literature on managing multinational ventures and the costs and advantages of having foreign versus domestic managers (Ghemawat and Vantrappen 2015;Kulchina 2016b;Mezias 2002;Sonkova and Karim 2013;Zhou 2014).…”

supporting

confidence: 58%

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Immigrants and Firm Performance: Effects on Foreign Subsidiaries versus Foreign Entrepreneurs

Kulchina¹,

Hernandez

2016

AMPROC

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Prior studies have demonstrated that foreign firms co-locate with immigrants from their home countries, but whether this improves profitability is unclear. We demonstrate that co-national immigrant communities positively affect the performance of foreign firms, and that this effect depends on the type of firm (entrepreneurial venture or MNC subsidiary) and manager (foreign versus local). We found that without an immigrant community, a foreign CEO has a negative effect on the performance of foreign entrepreneurial firms. However, this effect becomes positive as the size of the immigrant community increases because entrepreneurial firms with foreign managers benefit more from their co-national communities than similar firms with local managers. Conversely, MNC subsidiaries derive equal benefits from co-locating with immigrants regardless of their CEO's nationality. This is consistent with our expectation that entrepreneurial firms rely more on local communities than subsidiaries and that CEOs' social networks allow entrepreneurial firms to relate to these communities.

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Section: Discussionsupporting

confidence: 69%

supporting

confidence: 58%