Foreign Ownership and Subsidiary Performance: Impact on Research and Exports?

Abstract

In the mainstream international management literature the issue of the extent to which multinational corporations achieve the outcomes desired by host country stakeholders is yet to receive the attention it deserves. This paper shows that the contribution of mncs in the form of exports and royalties is significantly lower than that of local firms. Insufficient attention to local subsidiary interests may undermine the motivation of subsidiary managers to discover new sources of advantage for the mncs. It may also discourage subsidiary country governments from offering incentives to mncs for inward foreign direct investment.

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