Agglomeration effect on subsidiary capability scope and performance: an empirical study of electronic industry in China
by Peng-Yu Li; Fang-Yi Lo
International Journal of Business and Emerging Markets (IJBEM), Vol. 9, No. 1, 2017

Abstract: This paper examined the factors that influenced subsidiaries' capabilities and performance. The influence of host country factors, especially sub-national factors, on subsidiary capability scope and development have not been examined extensively in previous studies. In this study, we explore the impact of the two agglomeration effects on subsidiary capability scope and performance. Agglomeration of foreign firms brings the advantage of specification and on the other hand agglomeration of state-owned enterprises (SOEs) brings connection development those negatively affect subsidiary capability scope but positively affects subsidiary performance. Our data comes from Taiwanese subsidiaries of electronics industry invested in China between 2003 and 2007. The results show the agglomeration effects of foreign firms and SOEs leads subsidiaries to develop less capability scopes because of specialisation and limited local resources, however, agglomeration effect contributes to subsidiary performance.

Online publication date: Fri, 04-Nov-2016

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Business and Emerging Markets (IJBEM):
Login with your Inderscience username and password:

    Username:        Password:         

Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email