Internal equity financing and the performance of multinational subsidiaries in emerging economies

• 成果类型: Article
• 署名作者: Nguyen, Quyen T. K.; Rugman, Alan M.
• 署名单位: University of Reading
• 刊物名称: JOURNAL OF INTERNATIONAL BUSINESS STUDIES
• ISSN/ISSBN: 0047-2506
• DOI: 10.1057/jibs.2014.64
• 发表日期: 2015
• 页码: 468-490
• 关键词: INTERNALIZATION THEORY; internal equity financing; subsidiary-level financial management decision-making; pecking order theory; subsidiary performance; South East Asia/ASEAN

摘要

We examine the internal equity financing of the multinational subsidiary which retains and reinvests its own earnings. Internal equity financing is a type of firm-specific advantage (FSA) along with other traditional FSAs in innovation, research and development, brands and management skills. It also reflects subsidiary-level financial management decision-making. Here we test the contributions of internal equity financing and subsidiary-level financial management decision-making to subsidiary performance, using original survey data from British multinational subsidiaries in six emerging countries in the South East Asia region. Our first finding is that internal equity financing acts as an FSA to improve subsidiary performance. Our second finding is that over 90% of financing sources (including capital investment by the parent firms) in the British subsidiaries come from internal funding. Our third finding is that subsidiary-level financial management decision-making has a statistically significant positive impact on subsidiary performance. Our findings advance the theoretical, empirical and managerial analysis of subsidiary performance in emerging economies.