Universität zu Köln

Puck, Jonas ORCID: 0000-0002-1253-5155, Hoedl, Markus K., Filatotchev, Igor, Wolff, Hans-Georg ORCID: 0000-0002-6945-2764 and Bader, Benjamin (2016). Ownership mode, cultural distance, and the extent of parent firms' strategic control over subsidiaries in the PRC. Asia Pac. J. Manag., 33 (4). S. 1075 - 1106. NEW YORK: SPRINGER. ISSN 1572-9958

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Abstract

Previous studies often associated a specific type of ownership mode with the extent of control a parent firm may have over (strategic) decision-making in a foreign subsidiary, suggesting that parent firms should have higher control over wholly-owned subsidiaries (WoS) than international joint ventures (IJVs). Building on principal agent theory, we argue that in the Chinese context higher ownership levels do not necessarily have a positive effect on the extent of control over the foreign subsidiary. We further argue that cultural distance between the parent firm and the subsidiary moderates this relationship. We test our hypotheses using data from a sample of 156 foreign subsidiaries in the People's Republic of China (PRC) and find strong support for our arguments. Our findings show that in WoS parent firms reduce their extent of control, while in IJVs parent firms increase their extent of control. Moreover, we find that extent of control over WoS (IJVs) declines (increases) when cultural distance increases. Our results have significant theoretical implications for international business (IB) research as they challenge existing views with regard to the relationship between ownership mode and control as well as the moderating effect of cultural distance.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Puck, Jonas UNSPECIFIED orcid.org/0000-0002-1253-5155 UNSPECIFIED Hoedl, Markus K. UNSPECIFIED UNSPECIFIED UNSPECIFIED Filatotchev, Igor UNSPECIFIED UNSPECIFIED UNSPECIFIED Wolff, Hans-Georg UNSPECIFIED orcid.org/0000-0002-6945-2764 UNSPECIFIED Bader, Benjamin UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-255153
DOI:	10.1007/s10490-016-9471-2
Journal or Publication Title:	Asia Pac. J. Manag.
Volume:	33
Number:	4
Page Range:	S. 1075 - 1106
Date:	2016
Publisher:	SPRINGER
Place of Publication:	NEW YORK
ISSN:	1572-9958
Language:	English
Faculty:	Faculty of Human Sciences
Divisions:	Faculty of Human Sciences > Department Psychologie
Subjects:	Psychology
Uncontrolled Keywords:	Keywords Language INTERNATIONAL JOINT VENTURES; TRANSACTION COST INFLUENCES; WHOLLY OWNED SUBSIDIARIES; ENTRY MODE; MULTINATIONAL-CORPORATIONS; INSTITUTIONAL DISTANCE; UNITED-STATES; FOREIGN SUBSIDIARIES; PROPENSITY SCORE; AGENCY THEORY Multiple languages Management Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/25515