Ownership Strategies and Survival of Foreign Subsidiaries : Impacts of Institutional Distance and Experience

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

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Original languageEnglish
Pages (from-to)84-110
Journal / PublicationJournal of Management
Issue number1
Online published1 Feb 2007
Publication statusPublished - Feb 2007
Externally publishedYes


This article integrates institutional theory and organizational learning perspective and proposes a contingency framework on the relationship between ownership strategies and subsidiary performance. Using a sample of Japanese subsidiaries worldwide, the article finds important main effects of ownership, institutional distance, and host country experience on subsidiary survival. Furthermore, the effect of ownership is contingent on institutional distance and host country experience. In institutionally distant countries, subsidiaries have better survival chances if foreign parents have more ownership. Host country experience has a negative impact on subsidiary survival, but the effect is weaker if foreign parents have larger ownership positions in the subsidiaries.

Research Area(s)

  • Equity ownership, Joint ventures, Normative distance, Regulative distance, Subsidiary performance, Wholly owned subsidiaries