Title: The effects of an MNC subsidiary's integration and local responsiveness on its performance: an empirical study of Taiwanese enterprises' subsidiaries

Authors: Cher-Hung Tseng, Yeun-Wen Chang

Addresses: Department of Business Administration, National Pingtung Institute of Commerce, 51 Min Sheng E. Road, Pingtung 900, Taiwan. ' Department of Public Finance and Taxation, National Taichung Institute of Technology, Taichung, Taiwan

Abstract: The continuing trend of industrial globalisation and the apparent attractiveness of foreign markets have prompted an increasing number of Taiwanese enterprises to accelerate their transition toward a fully international operation by establishing foreign subsidiaries. In analysing 53 foreign subsidiaries of Taiwanese enterprises, this study explores the effects of a subsidiary|s integration and local responsiveness on its performance. The current analysis reveals that a subsidiary|s integration with its parent company and its local responsiveness both have a positive influence on its performance. Furthermore, the industry|s global integration has a positive moderating effect on the relationship between a subsidiary|s integration and its performance. Meanwhile, the wholly owned subsidiary entry mode has a negative moderating effect on the relationship between a subsidiary|s local responsiveness and its performance.

Keywords: subsidiary integration; subsidiary local responsiveness; subsidiary performance; multinational subsidiaries; multinational corporations; MNCs; Taiwan; competitive advantage; subsidiary strategy.

DOI: 10.1504/IJBPM.2005.007367

International Journal of Business Performance Management, 2005 Vol.7 No.4, pp.409 - 425

Published online: 13 Jul 2005 *

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