DOI QR코드

DOI QR Code

The Mediating Effect of Network Embeddedness on Investment Performance of Multinational Manufacturers in China

중국시장에 진출한 다국적제조기업의 투자성과에 미치는 네트워크 배태성의 매개효과 실증분석

  • 고숭 ((중국)산동여자대학교 창신창업학과) ;
  • 임성훈 (건국대학교 국제무역학과)
  • Received : 2023.01.27
  • Accepted : 2023.04.21
  • Published : 2023.04.30

Abstract

The purpose of this study is to demonstrate how internal capability adjustments made by subsidiaries in response to local market adaption and market changes, together with the use of internal and external networks, have an impact on the investment performance of such subsidiaries. From the empirical results, it was proven that the larger the extent of internal capability adjustment made by subsidiaries, and the more quickly and flexibly it is implemented, the more positive the investment performance is. The empirical findings also showed that in this process, the use of internal/external network embeddedness has a positive mediating impact on the investment performance. Additionally, the results of statistical analysis support the research hypothesis that external embeddedness has a greater mediating influence on multinational manufacturing companies entering Chinese market than internal embeddedness. It implies to the top managers of subsidiaries that the subsidiary should actively utilize external embeddedness to create a new locational competitive advantage in the local region, as well as develop a strategy to reduce foreignness costs such as cost of adapting to the local system.

본 연구는 자회사가 현지시장 적응과 시장변화에 대한 대응으로서 내부능력의 재조정을 실시하며, 나아가 조직 내·외부의 네트워크를 활용하는 것이 투자성과에 어떠한 영향을 미치는 실증하는데 연구목적을 둔다. 실증결과로부터 자회사의 내부능력 조정 크기가 클수록, 이를 신속하고 유연적으로 실행할수록 투자성과에 긍정적 효과가 발생함을 입증하였다. 이 과정에서 네트워크 내부배태성의 활용과, 네트워크 외부배태성의 활용이 투자성과에 긍정적 매개자로서 역할을 하는 것도 입증하였다. 또한 중국시장에 진출한 다국적제조기업에게는 외부배태성의 매개효과의 크기가 내부배태성의 매개효과 크기보다 더 클 것이라는 연구가설에 대해 통계분석 결과가 지지하는 것으로 나타났다. 이러한 분석결과는 자회사 최고경영자에게는 현지 정보의 탐색과 접근, 현지 제도에 적응 등 외국비용 절감 전략을 수립하는 것과 함께 자회사가 현지에서 새로운 지리적 경쟁우위를 창출하는 데 외부배태성을 적극적으로 활용해야 한다는 시사점을 제공한다.

Keywords

References

  1. Andersson, U., Forsgren, M. and Holm, U.(2002), "The Strategic Impact of External Networks: Subsidiary Performance and Competence Development in The Multinational Corporation," Strategic Management Journal, Vol.23 No.11, pp.979-996. https://doi.org/10.1002/smj.267
  2. Albis, N., Alvarez, I. and Garcia, A.(2021), "The Impact of External, Internal, and Dual Relational Embeddedness on the Innovation Performance of Foreign Subsidiaries: Evidence from a Developing Country," Journal of International Management, Vol.27 No.4, 100854.
  3. Arenius, P.(2005), "The Psychic Distance Postulate Revised: From Market Selection to Speed of Market Penetration," Journal of International Entrepreneurship, 3, pp.115-131. https://doi.org/10.1007/s10843-005-4203-6
  4. Argote, L. and Ingram, P.(2000), "Knowledge Transfer: A Basis for Competitive Advantage in Firms," Organizational Behavior & Human Decision Processes, Vol.82 No.1, pp.150-169. https://doi.org/10.1006/obhd.2000.2893
  5. Baron, R. M. and Kenny, D. A.(1986), "The Moderator-mediator Variable Distinction in Social Psychological Research: Conceptual, Strategic, and Statistical Considerations," Journal of Personality & Social Psychology, 51, pp.1173-1182. https://doi.org/10.1037/0022-3514.51.6.1173
  6. Barreto, I.(2010), "Dynamic Capabilities: A Review of Past Research and An Agenda for the Future," Journal of Management, Vol.36 No.1, pp.256-280. https://doi.org/10.1177/0149206309350776
  7. Bartlett, C. A. and Ghoshal, S.(1989), Managing Across Borders, Boston Massachusetts: Harvard Business School Press.
  8. Brooke, M. Z.(1994), "The Brooke Story: A Professional Half-Life in International Business," Journal of International Business Studies, Vol.25 No.4, pp.667-673. https://doi.org/10.1057/palgrave.jibs.8490217
  9. Bhatti, W. A., J. Larimo and Coudounaris, D. N.(2016), "The Effect of Experiential Learning on Subsidiary Knowledge and Performance," Journal of Business Research, Vol.69 No.5, pp.1567-1571. https://doi.org/10.1016/j.jbusres.2015.10.018
  10. Buckley, P. J., Clegg J. and Tan, H.(2006), "Cultural Awareness in Knowledge Transfer to China-The Role of Guanxi and Mianzi", Journal of World Business, Vol.41 No.3, pp.275-288. https://doi.org/10.1016/j.jwb.2006.01.008
  11. Cai, Z., Huang, Q., Liu, H., Liang, L. and Davison, R. M.(2013), "Developing Organizational Agility Through it Capability and KM Capability: The Moderating Effects of Organizational Climate," Pacific Asia Conference on Information Systems.
  12. Caves, R.(1996), Multinational Enterprise and Economic Analysis (2nd ed.), New York: Cambridge University Press.
  13. Ciabuschi, F., Holm, U. and Martin, O. M.(2014), "Dual Embeddedness, Influence and Performance of Innovating Subsidiaries in the Multinational Corporation," International Business Review, Vol.23 No.5, pp.897-909. https://doi.org/10.1016/j.ibusrev.2014.02.002
  14. Demeter, K., Szasz, L. and Racz, B.(2016), "The Impact of Subsidiaries' Internal and External Integration on Operational Performance," International Journal of Production Economics, 182, pp.73-85. https://doi.org/10.1016/j.ijpe.2016.08.014
  15. Dellestrand, H.(2011), "Subsidiary Embeddedness as A Determinant of Divisional Headquarters Involvement in Innovation Transfer Processes", Journal of International Management, Vol.17 No.3, pp.229-242. https://doi.org/10.1016/j.intman.2011.05.005
  16. Dunning, J. H.(1976), "Trade, Location of Economic Activity, and the MNE: A Search for an Eclectic Approach", In B. Ohlin, P. O. Hesselborn and P. M. Wijkman (Eds.), The International Allocation of Economic Activity, London: MacMillan.
  17. Dunning, J. H.(1981), International Production and the Multinational Enterprise, London: Allen and Unwin.
  18. Eisenhardt, K. M. and Martin, J. A.(2000), "Dynamic Capabilities: What are They?," Strategic Management Journal, 21, pp.1105-1121. https://doi.org/10.1002/1097-0266(200010/11)21:10/11<1105::AID-SMJ133>3.0.CO;2-E
  19. Fayol-Song, L.(2011), "Reasons Behind Management Localization in MNCs in China", Asia Pacific Business Review, Vol.17 No.4, pp.455-471. https://doi.org/10.1080/13602381.2010.546642
  20. Gao, S.(2022), Localization Strategy of Multinational Enterprises in China: An Integrated Approach on Embeddedness and Market Orientation, PhD Thesis, Konkuk Universtiy.
  21. Gao, S. and Lim, Sung-Hoon(2022), "Market Orientation Types and Investment Performance: Evidence from Multinational Manufacturers in China," Korea Trade Review, Vol.47 No.1, pp.145-161.
  22. Garcia-Pont, C., Canales, J. I. and Noboa, F.(2009), "Subsidiary Strategy: The Embeddedness Component," Journal of Management Studies, Vol.46 No.2, pp.182-214. https://doi.org/10.1111/j.1467-6486.2008.00797.x
  23. Gupta, A. K. and Govindarajan, V.(2000), "Knowledge Flows Within Multinational Corporations," Strategic Management Journal, Vol.21 No.4, pp.473-496. https://doi.org/10.1002/(SICI)1097-0266(200004)21:4<473::AID-SMJ84>3.0.CO;2-I
  24. Gupta, A. K. and Govindarajan, V.(2001), "Converting Global Presence into Global Competitive Advantage," Academy of Management Executive, Vol.15 No.2, pp.45-56.
  25. Hung, C. F.(2004), "Cultural Influence on Relationship Cultivation Strategies: Multinational Companies in China," Journal of Communication Management, Vol.8 No.3, pp.264-281. https://doi.org/10.1108/13632540410807682
  26. Hymer, S. H.(1960/1976), The International Operations of National Firms: A Study of Foreign Direct Investment, Cambridge: MIT Press.
  27. Jaworski, B. J. and Kohli, A. K.(1993), "Market Orientation: Antecedents and Consequences," Journal of Marketing, Vol.57 No.3, pp.53-70. https://doi.org/10.1177/002224299305700304
  28. Johanson, J. and Vahlne, J.(1977), "The Internationalization Process of the Firm: a Model of Knowledge Development and Increasing Foreign Market Commitments," Journal of International Business Studies, Vol.8 No.1, pp.23-32. https://doi.org/10.1057/palgrave.jibs.8490676
  29. Kostova, T. and Zaheer, S.(1999) "Organizational Legitimacy under Conditions of Complexity: The Case of the Multinational Enterprise," Academy of Management Review, 24, pp.64-81. https://doi.org/10.2307/259037
  30. Leposky, T., Arslan, A. and Kontkanen, M.(2017), "Determinants of Reverse Marketing Knowledge Transfer Potential From Emerging Market Subsidiaries to Multinational Enterprises' Headquarters," Journal of Strategic Marketing, Vol.25 No.7, pp.567-580. https://doi.org/10.1080/0965254X.2016.1195856
  31. Li, X., Liu, X. and Thomas, H.(2013), "Market Orientation, Embeddedness and the Autonomy and Performance of Multinational Subsidiaries in an Emerging Economy," Management International Review, Vol.53 No.6, pp.869-897. https://doi.org/10.1007/s11575-013-0177-0
  32. Lim, Sung-Hoon(2019), "An Empirical Analysis on MNC's Investment Performances in a Host Country through Market Orientation Mediation Effects," Korea Trade Review, Vol.44 No.2, pp.221-237. https://doi.org/10.22659/KTRA.2019.44.2.221
  33. Luo, Y.(2001), "Determinants of Local Responsiveness: Perspectives from Foreign Subsidiaries in An Emerging Market," Journal of Management, Vol.27 No.4, pp.451-477. https://doi.org/10.1177/014920630102700404
  34. Luo, Y. and Mezias, J.(2002), "Liabilities of Foreignness: Concepts, Constructs, and Consequences," Journal of International Management, Vol.8 No.3, pp.217-221. https://doi.org/10.1016/S1075-4253(02)00066-2
  35. Meyer, K. E., Mudambi, R. and Narula, R.(2011), "Multinational Enterprises and Local Contexts: The Opportunities and Challenges of Multiple Embeddedness," Journal of Management Studies, Vol.48 No.2, pp.235-252. https://doi.org/10.1111/j.1467-6486.2010.00968.x
  36. Monteiro, L. F., Arvidsson, N. and Birkinshaw, J.(2008), "Knowledge Flows within Multinational Corporations: Explaining Subsidiary Isolation and its Performance Implications," Organization Science, Vol.19 No.1, pp.90-107. https://doi.org/10.1287/orsc.1070.0264
  37. Nunnally, J. C.(1978), Psychometric Theory (2th ed), New York, NY: McGraw-Hill.
  38. Overby, E., Bharadwaj, A. and Sambamurthy, V.(2006), "Enterprise Agility and the Enabling Role of Information Technology," European Journal of Information Systems, Vol.15 No.2, pp.120-131. https://doi.org/10.1057/palgrave.ejis.3000600
  39. Prahalad, C. K. and Doz, Y. L.(1987), The Multinational Mission: Balancing Local Demands and Global Vision, New York: The Free Press.
  40. Pu, M. and Soh, P. H.(2018), "The Role of Dual Embeddedness and Organizational Learning in Subsidiary Development," Asia Pacific Journal of Management, Vol.35 No.2, pp.373-397. https://doi.org/10.1007/s10490-017-9513-4
  41. Sambamurthy, V., Bharadwaj, A. and Grover, V.(2003), "Shaping Agility Through Digital: Options Reconceptualizing the Role of Information Technology in Contemporary Firms", MIS Quarterly, Vol.27 No.2, pp.237-263. https://doi.org/10.2307/30036530
  42. Sanchez, R.(1995), "Strategic Flexibility in Product Competition", Strategic Management Journal, 16, pp.135-159. https://doi.org/10.1002/smj.4250160921
  43. Shari, H. and Zhang, Z.(1999), "A Methodology for Achieving Agility in Manufacturing Organisations An Introduction," In International Journal of Production Economics, Vol.62 No.1, pp.7-22. https://doi.org/10.1016/S0925-5273(98)00217-5
  44. Sharifi, H. and Zhang, Z.(2001), "Agile Manufacturing in Practice Application of a Methodology," International Journal of Operations & Production Management, Vol.21 No(5/6), pp.772-794. https://doi.org/10.1108/01443570110390462
  45. Sherehiy, B., Karwowski, W. and Layer, J. K.(2007), "A Review of Enterprise Agility: Concepts, Frameworks, and Attributes", International Journal of Industrial Ergonomics, Vol.37 No.5, pp.445-460. https://doi.org/10.1016/j.ergon.2007.01.007
  46. Singh, J., Sharma, G. and Hill, J.(2013), "Organizational Agility What it is, What it is not, and Why it Matters," Academy of Management Annual Meeting Proceedings, 1, 11813.
  47. Teece, D. J.(2007), "Explicating Dynamic Capabilities: The Nature and Microfoundations of (Sustainable) Enterprise Performance," Strategic Management Journal, Vol.28 No.13, pp.1319-1350. https://doi.org/10.1002/smj.640
  48. Teece, D. and Pisano, G.(1994), "The Dynamic Capabilities of Firms: An Introduction," Industrial and Corporate Change, Vol.3 No.3, pp.537-556. https://doi.org/10.1093/icc/3.3.537-a
  49. Teece, D. J., Pisano, G. and Shuen, A.(1997), "Dynamic Capabilities and Strategic Management," Strategic Management Journal, Vol.18 No.7, pp.509-533. https://doi.org/10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z
  50. Uzzi, B.(1997), "Social Structure and Competition in Interfirm Networks: The Paradox of Embeddedness," Administrative Science Quarterly, Vol.42 No.1, pp.35-67. https://doi.org/10.2307/2393808
  51. UNCTAD (2021), World Investment Report 2021 (Webpage). Available from https://unctad.org/system/files/official-document/wir2021_en.pdf(accessed September 10, 2022)
  52. Venaik, S., Midgley, D. F. and Devinney, T. M.(2004), "A New Perspective on the Integration Responsiveness Pressures Confronting Multinational Firms," Management International Review, 44, pp.15-48. https://doi.org/10.1007/978-3-322-90999-2_3
  53. Yang, C. and Liu, H. M.(2012), "Boosting Firm Performance Via Enterprise Agility and Network Structure," Management Decision, Vol.50 No.6, pp.1022-1044. https://doi.org/10.1108/00251741211238319
  54. Yusuf, Y., Sarhadi, M. and Gunasekaran, A.(1999), "Agile Manufacturing: The Drivers, Concepts and Attributes," International Journal of Production Economics, Vol.62 No.1-2, pp.33-43.
  55. Zhao, X., Lynch Jr, J. G., and Chen, Q.(2010), "Reconsidering Baron and Kenny: Myths and Truths about Mediation Analysis," Journal of Consumer Research, Vol.37 No.2, pp.197-206. https://doi.org/10.1086/651257
  56. Zhou, J., Mavondo, F. T. and Saunders, S. G.(2019), "The Relationship Between Marketing Agility and Financial Performance Under Different Levels of Market Turbulence," Industrial Marketing Management, 83, pp.31-41. https://doi.org/10.1016/j.indmarman.2018.11.008