Capability, environment and internationalization fit, and financial and marketing performance of MNEs' foreign subsidiaries An abductive contingency approach

Dessislava Dikova, Arjen Van Witteloostuijn*, Simon Parker

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

Purpose - Extant work in international business (IB) involves a partial contingency-theoretic perspective: a holistic view of the impact of bundles of contingencies on an outcome variable is missing. The purpose of this paper is to adopt a contingency approach to study multinational enterprise (MNE) subsidiary performance in the appropriate context of European transition economies at the beginning of the current millennium. Design/methodology/approach - Methodologically, the authors introduce abduction as a line of inquiry into IB and management to develop new theoretical insights, and apply the novel empirical general interaction method to estimate bundle effects. In so doing, the authors contribute to the further development of a theoretical and empirical toolkit to revitalize holistic, or configurational, quantitative research in IB and management. Findings - The authors find that capability fit is a necessary condition for high MNE subsidiary marketing performance, whilst environment fit is particularly critical for high MNE subsidiary financial performance. Research limitations/implications - A key limitation is that this is a cross-section study. Practical implications - This study offers insights as to subsidiary fit into Eastern Europe, indicating fitting entry and establishment modes. Originality/value - This paper offers a novel holistic approach to IB, both in terms of theoretical and empirical methodology.

Original languageEnglish
Pages (from-to)405-435
Number of pages31
JournalCross Cultural and Strategic Management
Volume24
Issue number3
DOIs
Publication statusPublished - 1 Jan 2017
Externally publishedYes

Keywords

  • Entry modes
  • Establishment modes
  • Fit-outcome relationships
  • Subsidiary performance

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