Network Development and Firm Performance : A Field Study of Internationalizing Japanese Firms

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Original languageEnglish
Pages (from-to)41-61
Journal / PublicationMultinational Business Review
Issue number3
Online published19 Nov 2004
Publication statusPublished - 2004
Externally publishedYes


This paper explores the potential competitive advantages from the development of an internal network of subsidiaries and external network of alliances. Given the broad scope and lack of systematic investigation in prior research, clinical field research was conducted in eleven Japanese subsidiaries in China. Our in-depth interviews revealed that there are benefits and costs associated with the development of both subsidiary networks and alliance networks. While there are exploitation and exploration benefits from subsidiary network development, internationalizing firms (especially smaller firms) are subject to the liability of foreignness. Alliance network development is an effective way to mitigate this liability if internationalizing firms choose the right alliance strategy.

Research Area(s)

  • Alliance strategy, Internationalisation, Multinational corporations, Subsidiaries, Subsidiary networks