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Article: Legitimacy and multi-level institutional environments: Implications for foreign subsidiary ownership structure

TitleLegitimacy and multi-level institutional environments: Implications for foreign subsidiary ownership structure
Authors
KeywordsForeign subsidiary ownership structure
Legitimacy
Multinational corporations
Issue Date2007
PublisherPalgrave Macmillan Ltd. The Journal's web site is located at http://www.palgrave-journals.com/jibs/index.html
Citation
Journal Of International Business Studies, 2007, v. 38 n. 4, p. 621-638 How to Cite?
AbstractIn this study, we examine from an institutional perspective the legitimacy rationale behind the choice of subsidiary ownership structure among multinational corporations (MNCs). We suggest that, when under a strong pressure to conform at the host country and local industry levels of their institutional environment, MNCs are likely to take a lower ownership stake in exchange for external legitimacy in the host country or local industry that their foreign subsidiaries are entering. We also suggest that MNCs are likely to take a higher ownership stake in response to strong internal pressure to sustain their internal legitimacy at the corporate level of their institutional environment. We also propose that MNCs are more likely to exchange ownership for legitimacy in local industries than in host countries, and in local markets with a high level of political instability than in those with a low level of political instability. These propositions are generally supported by our analysis of 4451 subsidiaries established by 898 Japanese MNCs that operated in 39 countries across 52 industries (two-digit SIC) between 1988 and 1999. © 2007 Academy of International Business. All rights reserved.
Persistent Identifierhttp://hdl.handle.net/10722/85842
ISSN
2015 Impact Factor: 3.62
2015 SCImago Journal Rankings: 4.208
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorChan, CMen_HK
dc.contributor.authorMakino, Sen_HK
dc.date.accessioned2010-09-06T09:09:53Z-
dc.date.available2010-09-06T09:09:53Z-
dc.date.issued2007en_HK
dc.identifier.citationJournal Of International Business Studies, 2007, v. 38 n. 4, p. 621-638en_HK
dc.identifier.issn0047-2506en_HK
dc.identifier.urihttp://hdl.handle.net/10722/85842-
dc.description.abstractIn this study, we examine from an institutional perspective the legitimacy rationale behind the choice of subsidiary ownership structure among multinational corporations (MNCs). We suggest that, when under a strong pressure to conform at the host country and local industry levels of their institutional environment, MNCs are likely to take a lower ownership stake in exchange for external legitimacy in the host country or local industry that their foreign subsidiaries are entering. We also suggest that MNCs are likely to take a higher ownership stake in response to strong internal pressure to sustain their internal legitimacy at the corporate level of their institutional environment. We also propose that MNCs are more likely to exchange ownership for legitimacy in local industries than in host countries, and in local markets with a high level of political instability than in those with a low level of political instability. These propositions are generally supported by our analysis of 4451 subsidiaries established by 898 Japanese MNCs that operated in 39 countries across 52 industries (two-digit SIC) between 1988 and 1999. © 2007 Academy of International Business. All rights reserved.en_HK
dc.languageengen_HK
dc.publisherPalgrave Macmillan Ltd. The Journal's web site is located at http://www.palgrave-journals.com/jibs/index.htmlen_HK
dc.relation.ispartofJournal of International Business Studiesen_HK
dc.rightsJournal of International Business Studies. Copyright © Palgrave Macmillan Ltd.en_HK
dc.subjectForeign subsidiary ownership structureen_HK
dc.subjectLegitimacyen_HK
dc.subjectMultinational corporationsen_HK
dc.titleLegitimacy and multi-level institutional environments: Implications for foreign subsidiary ownership structureen_HK
dc.typeArticleen_HK
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0047-2506&volume=38&issue=4&spage=621&epage=638&date=2007&atitle=Legitimacy+and+multi-level+institutional+environments:+Implications+for+foreign+subsidiary+ownership+structureen_HK
dc.identifier.emailChan, CM: cmkchan@hkucc.hku.hken_HK
dc.identifier.authorityChan, CM=rp01045en_HK
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1057/palgrave.jibs.8400283en_HK
dc.identifier.scopuseid_2-s2.0-34547271262en_HK
dc.identifier.hkuros128373en_HK
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-34547271262&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume38en_HK
dc.identifier.issue4en_HK
dc.identifier.spage621en_HK
dc.identifier.epage638en_HK
dc.identifier.eissn1478-6990-
dc.identifier.isiWOS:000247718600009-
dc.publisher.placeUnited Kingdomen_HK
dc.identifier.scopusauthoridChan, CM=36984599300en_HK
dc.identifier.scopusauthoridMakino, S=7403067722en_HK
dc.identifier.citeulike1436253-

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