• Title, Summary, Keyword: subsidiary

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An Empirical Analysis on the Determinants of Foreign Subsidiary's Local Embeddedness: Focusing on Korean MNCs in China

  • KIM, Byoung-Goo;KIM, Gyu-Bae
    • The Journal of Asian Finance, Economics and Business
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    • v.7 no.1
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    • pp.205-215
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    • 2020
  • The purpose of this paper is to empirically analyze the determinants of foreign subsidiary's local embeddedness because it is critically important for the subsidiary to build a variegated local network. This paper suggests that a MNC's global capability, the degree of autonomy granted by the headquarters of the multinational corporation to its foreign subsidiary, the foreign subsidiary's absorptive capacity based on local environment, and its level of localization will affect the subsidiary's local network embeddedness. The empirical analysis confirmed that when the headquarters gives the foreign subsidiary more autonomy, this has a positive effect on the local embeddedness of the foreign subsidiary and when the foreign subsidiary has a strong absorptive capacity, this has a positive correlation with the local embeddedness of the foreign subsidiary. And this paper found that when the foreign subsidiary has achieved a high level of staff localization, this foreign subsidiary will have a higher level of local embeddedness. This study identified the preceding conditions necessary for a foreign subsidiary of a multinational corporation to effectively embed itself in the local network by analyzing factors related to the multinational corporation's headquarters and subsidiaries, and thus contributes significantly to continued research on the local embeddedness of subsidiaries.

The Influence of Local, Organizational, and Relational Factors on Subsidiary's MNC Knowledge Adoption: The Case of Multinational Corporations in Korea (한국 진출 다국적기업 자회사의 지식습득 결정 요인에 관한 연구: 지식 획득원의 차이(본사 및 자회사) 비교를 중심으로)

  • Lee, Kang Mun
    • International Area Studies Review
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    • v.15 no.2
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    • pp.275-301
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    • 2011
  • This study examines antecedent factors that influence subsidiaries' MNC (multinational corporation) knowledge adoption. I argue that subsidiary local environmental factors(local embeddedness, level of local competition), subsidiary organizational factors(parent investment, subsidiary CEO expatriation, scope of subsidiary value chain), and subsidiary relational factors(subsidiary autonomy, the strength of subsidiary in MNC, social capital) are the important enablers for subsidiaries to adopt knowledge from other MNC units. Especially, I use two data set (knowledge from (1) peer subsidiaries, (2) parent company) to estimate the effect of the factors. The results indicate that subsidiary local embeddedness and scope of subsidiary value chain negatively influence on subsidiary knowledge adoption from peer subsidiaries. Conversely, the strength of subsidiary in MNC and social capital positively influence on that. Subsidiary knowledge adoption from parent company is positively influenced by parent investment and social capital.

Economic Effects of Subsidiary Services in Hospitals (병원급 의료기관 의료부대사업의 경제적 파급효과)

  • Lee, Ye Seol;Lee, Sang Gyu;Kwon, Sung Tak;Kim, Tae Hyun
    • Korea Journal of Hospital Management
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    • v.21 no.1
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    • pp.32-42
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    • 2016
  • This study is conducted to estimate economic ripple effects of subsidiary services of hospitals. Using the Input/Output Analysis, this study analyzes production inducement effect, added value inducement effect, and labor inducement effect. Also, it assesses potential economic effects of the subsidiary services of which the scope is expanded as the government's proposed in 2014. Data regarding hospital subsidiary services and economic effects are obtained from the hospitals' financial statements on the National Tax Services and the Bank of Korea. The major results of this study are summarized as follows; subsidiary service profits of hospitals are 466 billion won and rent profits of hospitals are 152 billion won. Of these, the rate of subsidiary service profits in tertiary hospitals is about 66% of total subsidiary service profits. Producement inducement effect of subsidiary services of hospitals is higher than that of total industry, service industry and medical service industry. Added value inducement effect of subsidiary services of hospitals is higher than that of total industry, manufacturing industry, service industry and medical service industry. Job position inducement effect of subsidiary service in hospitals is higher than that of total industry, service industry and medical service industry. Also, employment inducement effect of subsidiary service in hospitals is higher than that of total industry and medical service industry. The results may suggest that subsidiary services revenue in medical institutions contribute to improving operating profits. Facing with intense market competition and pressures to control health care costs, hospitals may need to determine whether subsidiary services help boost their profitability and improve customer satisfaction.

MNCs R&D Subsidiary Strategy : Focusing on Technology Firm Patent Performance (다국적기업의 R&D 자회사 전략 : 기술기업 연구개발 특허성과를 중심으로)

  • Kim, Ji Yeon
    • Journal of Information Technology Applications and Management
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    • v.24 no.4
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    • pp.13-24
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    • 2017
  • This study aims to analyze which subsidiary configuration strategy is more effective under uncertainty especially technology base multinational corporations (henceforth MNCs). In previous studies real option theory scholars argue that high breadth subsidiary configuration is most effective strategy because that provides flexibility to MNCs global network. In this study I want unveil more various types of uncertainty such as technology and learning uncertainty which are more important for technology base firm and further more examine the effect of MNCs subsidiary configuration on firm R&D performance each uncertainty case. Empirical study is performed by negative binominal model based on Japanese 108 multinational corporations. The result shows that under technology uncertainty, high breadth subsidiary configuration is better for firm R&D performance but under learning uncertainty high depth subsidiary configuration is better. Thus, the effects of MNCs subsidiary configuration on firm value can differ by types of uncertainty.

Analysis and Reduction of Subsidiary Resonance of an Optical Pickup Actuator (광 픽업 액추에이터의 부공진 원인 규명과 저감화)

  • Seo, Jin-Gyu;Jeong, Ho-Seop;Park, Gi-Hwan
    • Transactions of the Korean Society of Mechanical Engineers A
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    • v.24 no.3
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    • pp.728-734
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    • 2000
  • An asymmetric actuator can be used to reduce the distance between the reflective mirror and objective lens of a small optical disk drive for use in the notebook-sized personal computer data storage devices. However, this asymmetric actuator is very sensitive to the subsidiary resonance which is caused by its rigid body motion. In this paper, an analytical approach using a simple lumped parameter system model is presented with a physical insight to investigate why the subsidiary resonance occurs. The finite element method is used to figure out the force and torque characteristics of the asymmetric actuator which are essential to understand the subsidiary vibration characteristics. The frequency responses are presented to examine how the subsidiary resonance is altered for various situations of having different thickness of a yoke and permanent magnet and of having a different magnet circuit. Finally, the design guidelines to avoid the subsidiary resonance will be presented.

CORPORATE PARENT EFFECT ON SUBSIDIARY TECHNOLOGY AND DIVERSIFICATION STRATEGIES

  • Ang, Siah-Hwee
    • International Commerce and Information Review
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    • v.1 no.1
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    • pp.3-24
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    • 2008
  • This paper examines the corporate parent effect on the diversification strategies of triad and Asian subsidiaries in the ASEAN region. I find that triad subsidiaries tend to participate in high technology intensive industries, and are more likely to diversify. In addition, I also find that the subsidiary diversification strategy is significantly affected by the number of affiliations under the same corporate parent that perform the same or different activities in the region. These results shed light on the influence of corporate parent on subsidiary-level strategy and the role of the subsidiary within an economically integrated region. Various implications are discussed.

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A Typology of MNC's Foreign Subsidiaries: A Conceptual Model and Korean Cases (다국적기업 해외자회사의 유형분류법: 개념적 모형과 한국기업의 사례)

  • Kim, Min-Sook;Bang, Ho-Yeol
    • International Commerce and Information Review
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    • v.15 no.1
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    • pp.227-256
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    • 2013
  • Existing multinational subsidiary typologies seem to have limitations in two respects. First, the prevalence of subsidiary classification along two-dimensions fails to capture many distinct subsidiary types. Failure to reflect a sufficient richness in dimensionality can give rise to a partial picture of subsidiary typologies in the international business literature. A new typology developed from multi-dimensional approach will be required for reflecting various subsidiary roles in the multinational enterprise. Second, multinational subsidiary performing a number of activities is hard to be defined functionally across the value chain activities. In addition, multinational subsidiary roles can vary dramatically. In conclusion, despite a growing amount of work on subsidiary typologies, there seems to be limited convergence of results. the study regarding subsidiary roles still remain a challenge. In this respect, the purpose of this study is to develop a new typology based on multi-dimensional approach in order to overcome the limitations of traditional typologies. To classify subsidiary types, we propose 8 types of multinational subsidiary according to three dimensions that are adopted: (1) number of required value chain activities (2) subsidiary's sourcing capability and autonomy (3) global orientation (3) The case study analyzing Korean foreign subsidiaries appropriate for 8 types is performed to establish the validity of this study.

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MNE's Ability to Mitigate the FX Exposure: Subsidiary Network and Pass-through Ability

  • Cho, Hyejin
    • East Asian Journal of Business Economics (EAJBE)
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    • v.6 no.4
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    • pp.1-12
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    • 2018
  • Purpose - This paper tests the effect of the structure of manufacturing and marketing subsidiary network on FX exposure of Korean MNEs. Furthermore, the moderating effect of pass-through ability on the relationship between the subsidiary network and FX exposure is explored. Research design and methodology - This study utilizes a sample of 309 Korean MNEs constructed from database offered by KOTRA and KIS-VALUE. Results - As operational flexibility arising from having operations in multiple locations provides an option for firms to tackle FX exposure, greater breadth of manufacturing subsidiary network reduces FX exposure, and greater depth increases FX exposure. However, both the breadth and depth of marketing subsidiary network decrease FX exposure due to the firm's higher level of market presence and knowledge to devise an appropriate marketing strategy that can buffer adverse exchange rate movement. Such an effect is intensified when MNE's have FX exposure pass-through ability stemming from differentiated good. Conclusions - Empirical findings suggest that types and structure of Korean MNEs' foreign subsidiary network are closely related to the level of FX exposure they are experiencing. Also, they can utilize marketing subsidiary network more efficiently when having a higher R&D intensity.

A Study on Moderating Effects of Autonomy on Performance of MNC Subsidiaries in Korea (다국적기업 한국자회사의 성과에 대한 자율성 조절효과 연구)

  • Yu, Jae-Har;Lee, Chun-Su
    • International Commerce and Information Review
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    • v.18 no.2
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    • pp.195-218
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    • 2016
  • This study seeks to find out the determinants of subsidiary performance. In addition, moderating effect of autonomy on the relationship between subsidiary competence, subsidiary relationship and subsidiary configurational focus, and subsidiary performance. In studying the moderating effect of autonomy on subsidiary performance, the results will give invaluable insights to foreign subsidiaries in Korea to better compete in competitive Korean market. The results of empirical study showed that subsidiary with higher level of interaction with its intra-MNC network has higher level of performance. Thus, active interaction with headquarter and its affiliates will lead to better performance. Subsidiary with higher level of competence has higher level of performance. Thus, subsidiary should attain higher level of competence to better compete in Korea. Subsidiary autonomy has moderating effect on the relationship between configurational focus and performance. Thus, optimal MNC subsidiary configuration and attainment of subsidiary autonomy is needed to secure competitiveness in Korean market.

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