Institutional and Resource‐Based Explanations for Subsidiary Performance

18 Pages Posted: 14 Jul 2017

See all articles by Mathew Hughes

Mathew Hughes

Durham Business School

Taman H. Powell

Cardiff University

Leanne Chung

Cardiff University

Kamel Mellahi

The University of Warwick

Date Written: July 2017

Abstract

Addressing calls to integrate insights from institutional theory and the resource‐based view, we bring together dual theoretical explanations from institutional theory and the resource‐based view to examine the effectiveness of transfer of practice and human capital development as two routes to subsidiary performance. Our study of Hong Kong firms with subsidiaries in Mainland China shows that both routes positively affect subsidiary performance. However, our data show that our sampled firms struggled to successfully transfer practices from their parents. We attribute an explanation for this to the characteristics of practices as organizational capabilities in which transfer is made harder by the difficulty in replicating such capabilities. Consequently, developing subsidiary human capital is an important ally to practice transfer as a means to achieve superior subsidiary performance. Our results raise interesting questions about practice transfer and the resource‐based view relevant to future scholarly research.

Suggested Citation

Hughes, Mathew and Powell, Taman H. and Chung, Leanne and Mellahi, Kamel, Institutional and Resource‐Based Explanations for Subsidiary Performance (July 2017). British Journal of Management, Vol. 28, Issue 3, pp. 407-424, 2017. Available at SSRN: https://ssrn.com/abstract=3001426 or http://dx.doi.org/10.1111/1467-8551.12169

Mathew Hughes (Contact Author)

Durham Business School

Mill Hill Lane
Durham, Durham DH1 3LB
United Kingdom

Taman H. Powell

Cardiff University

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

Leanne Chung

Cardiff University

Kamel Mellahi

The University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

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