This study aims to investigate the factors that influence the longevity of multinational corporations’ (MNCs) subsidiaries in host markets.
The authors introduce a data-driven approach to categorizing subsidiary longevity, addressing limitations in prior research that relied on arbitrary age thresholds. Using a random forest classifier, the authors propose the “20–30 rule,” classifying subsidiaries as young if they are 20 years old or less and as longstanding if they are 30 years old or more. This method enhances both classification accuracy and managerial relevance. The proposed hypotheses are tested on a data set of 1,463 Japanese subsidiaries operating across 26 developed and developing countries, providing robust empirical support.
The results yield key insights into the drivers of subsidiary longevity within MNCs. The authors find that strategic asset-seeking subsidiaries tend to exhibit greater longevity in host markets. While motives such as market access and resource acquisition are important, they do not ensure long-term success unless complemented by institutional quality. The authors also underscore the role of marketing leadership in aligning global strategies with local market conditions to drive subsidiary success in global business-to-business (B2B) markets.
This study advances the literature by integrating the resource-based view and institutional-based view to explain subsidiary longevity. The authors contribute to B2B marketing by highlighting how strategic asset utilization and institutional factors enhance subsidiary competitiveness and longevity. These insights refine industrial marketing perspectives by reinforcing the strategic role of subsidiary mandates in long-term industrial value creation.
