The influence of home-country resources and state ownership on subsidiary’s performance: a multilevel perspective
ISSN: 0955-534X
Article publication date: 4 December 2023
Issue publication date: 23 January 2024
Abstract
Purpose
Although emerging markets are distinctly known for the rapid growth and international expansion of their state-owned enterprises, little is known about the influence of parent resource advantages and mixed state ownership on a subsidiary’s performance. Using the resource-based view, this study aims to investigate how resource advantages from the parent company and state ownership influence the performance of subsidiaries.
Design/methodology/approach
This study included a unique data set of 207 subsidiaries from 33 large Brazilian multinationals located in 32 countries from 2000 to 2015. The authors used a hierarchical linear modeling and a multilevel structure based on data at different levels to analyze the influence of home-country parent resource advantages and state ownership on host-country subsidiary’s performance.
Findings
This study illustrates that state ownership can alleviate the resource advantages of parent companies. Evidence is presented, indicating that low and medium degrees of state ownership have a negative impact on the resource advantages of the parent company, consequently reducing the subsidiary’s performance. Moreover, this study highlights that low and medium degrees of state ownership lead to conflicting interests between state ownership and parent resource advantages, resulting in an overall decline in subsidiary performance.
Originality/value
This research contributes new evidence regarding state ownership and resource advantages to the field of international business studies and the domain of Latin American multinational enterprises, Multilatinas. The results suggest that low and medium levels of state ownership diminish the influx of resources from parent companies, thereby restricting the subsidiary’s performance.
Keywords
Acknowledgements
We would like to thank the Guest Editor Mohamed Amal who provided the ideal assistance during the process of review and publication of this paper. The authors are grateful for the constructive comments and suggestions provided by the three anonymous reviewers that considerably helped to increase the quality of this paper.
Funding: This work was supported by the Coordenação de Aperfeiçoamento de Pessoal de Nível Superior e Brasil (CAPES) e código de financiamento 001 and financed by National Council for Scientific and Technological Development – CNPq (Proc. 152060/2022-7).
Conflict of interest: The authors declare that there is no conflict of interest.
Citation
Alcântara, J.N.d., Calegario, C.L.L., Viglioni, M.T.D. and Carneiro, J. (2024), "The influence of home-country resources and state ownership on subsidiary’s performance: a multilevel perspective", European Business Review, Vol. 36 No. 1, pp. 32-49. https://doi.org/10.1108/EBR-05-2023-0152
Publisher
:Emerald Publishing Limited
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