Access the full text.
Sign up today, get DeepDyve free for 14 days.
Yadong Luo, Huan Zhang, Juan Bu (2019)
Developed country MNEs investing in developing economies: Progress and prospectJournal of International Business Studies, 50
T. Kostova, Srilata Zaheer (1999)
Organizational Legitimacy Under Conditions of Complexity: The Case of the Multinational EnterpriseAcademy of Management Review, 24
M. Wouters, E. Jarwaarde, Bianca Groen (2007)
Supplier development and cost management in Southeast Asia—Results from a field studyJournal of Purchasing and Supply Management, 13
Petra Christmann, Diana Day, George Yip (1999)
The relative influence of country conditions, industry structure, and business strategy on multinational corporation subsidiary performanceJournal of International Management, 5
C. Li, Tser-yieth Chen, P. Yang (2016)
Local Embeddedness, Market Focus, and Productivity: Evidence of Taiwanese Manufacturing MNE Subsidiaries in ChinaGrowth and Change, 47
Mariko Sakakibara, H. Yamawaki (2008)
What determines the profitability of foreign direct investment? A subsidiary‐level analysis of Japanese multinationalsManagerial and Decision Economics, 29
R. Salomon, Zheying Wu (2012)
Institutional distance and local isomorphism strategyJournal of International Business Studies, 43
Christian Schwens, Julia Eiche, Ruediger Kabst (2011)
The Moderating Impact of Informal Institutional Distance and Formal Institutional Risk on SME Entry Mode ChoiceERN: Other IO: Empirical Studies of Firms & Markets (Topic)
C. Chan, T. Isobe, Shige Makino (2008)
Which country matters? Institutional development and foreign affiliate performanceSouthern Medical Journal, 29
Yadong Luo (2007)
From foreign investors to strategic insiders: Shifting parameters, prescriptions and paradigms for MNCs in ChinaJournal of World Business, 42
Naoki Ando (2014)
The effect of localization on subsidiary performance in Japanese multinational corporationsThe International Journal of Human Resource Management, 25
Virginia Hernández, M. Nieto, A. Boellis (2018)
The asymmetric effect of institutional distance on international location: Family versus nonfamily firmsGlobal Strategy Journal, 8
Ajai Gaur, A. Delios, Kulwant Singh (2007)
Institutional Environments, Staffing Strategies, and Subsidiary PerformanceJournal of Management, 33
Francesco Ciabuschi, Ulf Holm, Oscar Martín (2014)
Dual embeddedness, influence and performance of innovating subsidiaries in the multinational corporationInternational Business Review, 23
S. Rangan, A. Drummond (2011)
The problem of control and the role of home–host ties in explaining multinationals' foreign operations, competitiveness, and performanceGlobal Strategy Journal, 1
Tulay Ilhan-Nas, Tarhan Okan, Ekrem Tatoğlu, M. Demirbag, K. Glaister (2018)
The effects of ownership concentration and institutional distance on the foreign entry ownership strategy of Turkish MNEsJournal of Business Research
R. Florida, M. Kenney (1991)
Transplanted Organizations: The Transfer of Japanese Industrial Organization to the U.S.American Sociological Review, 56
Howook Shin, Seunghyup Lee (2019)
Economic crisis, intra-MNC production shifts and MNC performance from a network perspectiveAsia Pacific Journal of Management, 36
Diego Quer, Laura Rienda, Rosario Andreu, Siran Miao (2019)
Host country experience, institutional distance and location choice of Chinese MNEsCross Cultural & Strategic Management
X. Bai, Jeanine Chang, J. Li (2019)
How Do International Joint Ventures Build Legitimacy Effectively in Emerging Economies? CSR, Political Ties, or Both?Management International Review, 59
Keiko Ito, K. Fukao (2010)
Determinants of the Profitability of Japanese Manufacturing Affiliates in China and Other Regions: Does Localisation of Procurement, Sales and Management Matter?Wiley-Blackwell: World Economy
C. Yu, Tsai-Ju Liao (2008)
The impact of governance mechanisms on transaction-specific investments in supplier-manufacturer relationships: A comparison of local and foreign manufacturersManagement International Review, 48
Sangcheol Song (2017)
Host Market Uncertainty, Subsidiary Characteristics, and Growth Option ExerciseLong Range Planning, 50
Sangcheol Song (2020)
Actualization of growth potential in international joint ventures: The moderating effects of localization strategiesJournal of World Business, 55
Ulf Elg, P. Ghauri, J. Child, S. Collinson (2017)
MNE microfoundations and routines for building a legitimate and sustainable position in emerging marketsJournal of Organizational Behavior, 38
A. Distel, W. Sofka, Pedro Faria, M. Preto, A. Ribeiro (2019)
Dynamic capabilities for hire – How former host-country entrepreneurs as MNC subsidiary managers affect performanceJournal of International Business Studies, 53
Youjin Baik, Young‐Ryeol Park (2019)
Managing legitimacy through corporate community involvement: The effects of subsidiary ownership and host country experience in ChinaAsia Pacific Journal of Management, 36
C. Fey, Ingmar Björkman (2000)
The Effect of Human Resource Management Practices on MNC Subsidiary Performance in RussiaJournal of International Business Studies, 32
Hokey Min, Michael Latour, Alvin Williams (1994)
Positioning against foreign supply sources in an international purchasing environmentIndustrial Marketing Management, 23
T. Kostova, Kendall Roth, M. Dacin (2008)
Institutional Theory in the Study of Multinational Corporations: A Critique and New DirectionsAcademy of Management Review, 33
Ajai Gaur, J. Lu (2007)
Ownership Strategies and Survival of Foreign Subsidiaries: Impacts of Institutional Distance and ExperienceJournal of Management, 33
M. Demirbag, Marina Apaydin, Ekrem Tatoğlu (2011)
Survival of Japanese subsidiaries in the Middle East and North AfricaJournal of World Business, 46
S. Hackett, K. Srinivasan (1998)
Do supplier switching costs differ across Japanese and US multinational firmsJapan and the World Economy, 10
M. Zimmerman, Gerald Zeitz (2002)
Beyond Survival: Achieving New Venture Growth by Building LegitimacyAcademy of Management Review, 27
Journal of World Business, 48
Kaoru Natsuda, J. Thoburn (2013)
Industrial policy and the development of the automotive industry in ThailandJournal of the Asia Pacific Economy, 18
Daphne Yiu, Shige Makino (2002)
The Choice Between Joint Venture and Wholly Owned Subsidiary: An Institutional PerspectiveOrgan. Sci., 13
Xiaohui Liu, Lan Gao, Jiangyong Lu, Eleni Lioliou (2016)
Environmental risks, localization and the overseas subsidiary performance of MNEs from an emerging economyJournal of World Business, 51
T. Kostova, S. Beugelsdijk, W. Scott, Vincent Kunst, C. Chua, Marc Essen (2019)
The construct of institutional distance through the lens of different institutional perspectives: Review, analysis, and recommendationsJournal of International Business Studies, 51
Felix Reimann, M. Ehrgott, Lutz Kaufmann, C. Carter (2012)
Local stakeholders and local legitimacy: MNEs' social strategies in emerging economiesJournal of International Management, 18
J. Lu, Dean Xu (2006)
Growth and Survival of International Joint Ventures: An External-Internal Legitimacy PerspectiveJournal of Management, 32
T. Machikita, M. Tsuji, Y. Ueki (2016)
Does Kaizen create backward knowledge transfer to Southeast Asian firmsJournal of Business Research, 69
Journal of World Business, 53
Ingo Forstenlechner, Kamel Mellahi (2011)
Gaining legitimacy through hiring local workforce at a premium: The case of MNEs in the United Arab EmiratesJournal of World Business, 46
Baozhuang Niu, Yaoqi Liu, Huajiang Luo, Beibei Feng (2019)
Domestic sourcing vs. cross-border sourcing: Impact of the quality of the scrap metal and Government's tariff policiesJournal of Cleaner Production
T. Andrews, Khongphu Nimanandh, K. Htun, Orapin Santidhirakul (2020)
MNC response to superstitious practice in Myanmar IJVs: Understanding contested legitimacy, formal–informal legitimacy thresholds, and institutional disguiseJournal of International Business Studies, 53
Paul DiMaggio, W. Powell (1983)
THE IRON CAGE REVISITED:The New Economic Sociology
Zhaohui Wu, F. Jia (2018)
Toward a theory of supply chain fields – understanding the institutional process of supply chain localizationJournal of Operations Management
Marketa Rickley, S. Karim (2018)
Managing institutional distance: Examining how firm-specific advantages impact foreign subsidiary CEO staffingCGN: General Management (Topic)
Peidong Sun, Kamel Mellahi, E. Thun (2010)
The dynamic value of MNE political embeddedness: The case of the Chinese automobile industryJournal of International Business Studies, 41
Jianhong Zhang, Jiangang Jiang, N. Noorderhaven (2019)
Is certification an effective legitimacy strategy for foreign firms in emerging markets?International Business Review
Abigail Hornstein, Minyuan Zhao (2018)
Reaching through the fog: Institutional environment and cross‐border giving of corporate foundationsStrategic Management Journal
T. Lewis, H. Yildirim (2005)
Managing Switching Costs in Multiperiod Procurements with Strategic BuyersWiley-Blackwell: International Economic Review
Rogier Busser (2008)
‘Detroit of the East’? Industrial Upgrading, Japanese Car Producers and the Development of the Automotive Industry in ThailandAsia Pacific Business Review, 14
Piotr Trąpczyński, Elitsa Banalieva (2016)
Institutional difference, organizational experience, and foreign affiliate performance: Evidence from Polish firmsJournal of World Business, 51
Alessandra Perri, Ulf Andersson, P. Nell, G. Santangelo (2011)
Balancing the Trade-Off between Learning Prospects and Spillover Risks: MNC Subsidiaries' Vertical Linkage Patterns in Developed CountriesDevelopment Economics: Microeconomic Issues in Developing Economies eJournal
R. Charpin, E. Powell, A. Roth (2020)
The influence of perceived host country political risk on foreign subunits' supplier development strategiesJournal of Operations Management
M. Carney, M. Dieleman, Markus Taussig (2016)
How are institutional capabilities transferred across bordersJournal of World Business, 51
Yuanyuan Zhang, Weiguo Zhong, Na Wen, D. Jiang (2014)
Asset specificity and complementarity and MNE ownership strategies: The role of institutional distancesIndustrial Marketing Management, 43
Hongjuan Zhang, M. Young, Justin Tan, Weizheng Sun (2018)
How Chinese companies deal with a legitimacy imbalance when acquiring firms from developed economiesJournal of World Business
Y. Gong (2006)
The impact of subsidiary top management team national diversity on subsidiary performance: Knowledge and legitimacy perspectivesManagement International Review, 46
Tulay Ilhan-Nas, Tarhan Okan, Ekrem Tatoğlu, M. Demirbag, G. Wood, K. Glaister (2018)
Board composition, family ownership, institutional distance and the foreign equity ownership strategies of Turkish MNEsJournal of World Business
Ajai Gaur, C. Pattnaik, Deeksha Singh, J. Lee (2019)
Internalization advantage and subsidiary performance: The role of business group affiliation and host country characteristicsJournal of International Business Studies
Palitha Konara, V. Shirodkar (2018)
Regulatory Institutional Distance and MNCs' Subsidiary Performance: Climbing up Vs. Climbing Down the Institutional LadderJournal of International Management
Julia Kubny, Hinrich Voss (2014)
Benefitting from Chinese FDI? An assessment of vertical linkages with Vietnamese manufacturing firmsInternational Business Review, 23
Marc Bellemare, T. Masaki, Thomas Pepinsky (2017)
Lagged Explanatory Variables and the Estimation of Causal EffectThe Journal of Politics, 79
I. Ivarsson, C. Alvstam (2011)
Upgrading in global value-chains: a case study of technology-learning among IKEA-suppliers in China and Southeast AsiaJournal of Economic Geography, 11
Tilo Halaszovich, S. Lundan (2016)
The moderating role of local embeddedness on the performance of foreign and domestic firms in emerging marketsInternational Business Review, 25
Ulf Andersson, Ingmar Björkman, M. Forsgren (2005)
Managing subsidiary knowledge creation: The effect of control mechanisms on subsidiary local embeddednessInternational Business Review, 14
Björn Ambos, K. Asakawa, Tina Ambos (2011)
A dynamic perspective on subsidiary autonomyGlobal Strategy Journal, 1
M. Cusumano, Takeishi Akira (1991)
Supplier relations and management: A survey of Japanese, Japanese-transplant, and U. S. auto plantsQuality Engineering, 37
Witold Henisz (2000)
The Institutional Environment for Multinational InvestmentJournal of Law Economics & Organization, 16
Jae Jung, Khan-Pyo Lee (2018)
Host Country Sourcing of Multinational Enterprises: A Corporate Social Responsibility PerspectiveJournal of Business Ethics, 152
Kazunobu Hayakawa, Tadashi Ito (2018)
Local Procurement and Firm Performance: Pure-local Inputs and Semi-local InputsJournal of Southeast Asian Economies (JSEAE), 35
J. Lee, Y. Park, P. Ghauri, B. Park (2014)
Innovative Knowledge Transfer Patterns of Group-Affiliated Companies: The effects on the Performance of Foreign SubsidiariesJournal of International Management, 20
J. Hong, R. Snell (2013)
Developing New Capabilities across a Supplier Network through Boundary Crossing: A Case Study of a China-Based MNC Subsidiary and its Local SuppliersOrganization Studies, 34
Xiaoying Li, Laixiang Sun (2017)
How do sub-national institutional constraints impact foreign firm performance?International Business Review, 26
Based on a legitimacy perspective, this study aims to investigate when local sourcing, as a strategic legitimacy action, improves or impairs subsidiary performance. The authors investigate the moderating role of regulatory/normative institutional distance in the relationship between local sourcing and subsidiary performance. Particularly, departing from prior relevant research, the authors reflect on the direction of institutional distance, categorizing it as either upward or downward institutional distance.Design/methodology/approachUsing Japanese governmental data, this study performs a panel data analysis using a sample of 1,054 Japanese subsidiaries operating in 37 host countries over a 5-year observation period.FindingsThe authors reveal that downward regulatory/normative institutional distance more positively moderates the relationship between local sourcing and subsidiary performance than upward regulatory/normative distance.Originality/valueThere is little research that specifically discusses the performance effects of local sourcing while considering legitimacy concerns. Moreover, the results of analyses of the relationship between local sourcing and subsidiary performance in existing studies are inconsistent, suggesting that it is necessary to identify the boundary conditions under which local sourcing improves or impairs subsidiary performance. To fill these gaps, this study clarifies when local sourcing improves or impairs subsidiary performance based on a legitimacy perspective. The authors’ finding makes a clear contribution to the literature on strategic legitimacy actions and input localization in multinational corporations.
Cross Cultural & Strategic Management – Emerald Publishing
Published: Sep 20, 2022
Keywords: Local sourcing; Subsidiary performance; Regulatory distance; Normative distance; Legitimacy
Read and print from thousands of top scholarly journals.
Already have an account? Log in
Bookmark this article. You can see your Bookmarks on your DeepDyve Library.
To save an article, log in first, or sign up for a DeepDyve account if you don’t already have one.
Copy and paste the desired citation format or use the link below to download a file formatted for EndNote
Access the full text.
Sign up today, get DeepDyve free for 14 days.
All DeepDyve websites use cookies to improve your online experience. They were placed on your computer when you launched this website. You can change your cookie settings through your browser.