Global market integration, efficiency orientation, and drivers of foreign subsidiary divestments
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Publication type
Vlerick strategic journal articlePublication Year
2021Journal
Journal of World BusinessPublication Volume
56Publication Issue
5
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Differences in global market integration across industries have important repercussions for MNC strategy and the drivers of manufacturing subsidiary divestment decisions. Global industry integration and the associated competitive pressures lead MNCs to adopt cost efficiency strategies for their subsidiary networks, and subsidiary divestment decisions are strongly driven by labor cost considerations. In non-integrated industries, host country demand conditions are the prime driver of divestments. These patterns are the most salient for MNCs that have aligned their strategy with the global industry environment. Analysis of the divestment hazards of 3827 Japanese manufacturing subsidiaries in 57 countries provides support for these conjectures.Keyword
Affiliate Divestment, Global Industry Integration, Responsiveness, Global Strategy, EfficiencyKnowledge Domain/Industry
Entrepreneurshipae974a485f413a2113503eed53cd6c53
10.1016/j.jwb.2021.101228