Firm-specific intangible assets and subsidiary profitability: The moderating role of distance, ownership strategy and subsidiary experience

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Abstract

How does distance attenuate the value of MNC parent intangible assets on affiliate profitability? Beyond the basic assumption of internalization theory about the positive relationship between parent intangibles and foreign affiliate performance, we test how this relationship, is contingent on ownership strategy, subsidiary experience, and is moderated by the distance between home and host economies, in terms of differences in technological capacity, intellectual property regimes, economic development, language and geography. Based on newly-available accounting data on intangible assets, we test hypotheses on a sample of over 2000 multinationals and 5000 of their overseas affiliates in 45 home and host economies.

Original languageEnglish (US)
Pages (from-to)950-964
Number of pages15
JournalJournal of World Business
Volume51
Issue number6
DOIs
StatePublished - Nov 1 2016

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Finance
  • Marketing

Keywords

  • Distance
  • Intangibles
  • Multinational enterprise
  • Ownership strategy
  • Profitability
  • Subsidiary experience

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