Skip to Main Content
Article navigation
Purpose

The aim of this paper is to investigate how multinational enterprise (MNE) subsidiary capabilities are influenced by the firm-specific advantages (FSAs) of the parent company, as well as by cultural and geographic distance between the home and host country.

Design/methodology/approach

This paper assesses how the effects of the parent FSAs, cultural distance and geographic distance on subsidiary capabilities vary for different value-chain activities, with an empirical application to 60 foreign subsidiaries operating in Canada.

Findings

This paper uncovers distinct, three-way interaction effects among parent-level FSAs, cultural distance and geographic distance for upstream versus downstream activities in the value chain.

Originality/value

We find that in special cases, high levels of distance can be positive for MNEs, in terms of driving the creation of stronger subsidiary capabilities.

Licensed re-use rights only
You do not currently have access to this content.
Don't already have an account? Register

Purchased this content as a guest? Enter your email address to restore access.

Please enter valid email address.
Email address must be 94 characters or fewer.
Pay-Per-View Access
$39.00
Rental

or Create an Account

Close Modal
Close Modal