۱- Introduction

۲- Literature review and hypothesis development

۳- Research method

۴- Analysis

۵- Discussion & conclusions

References

Abstract

We argue that ownership strategies can be a double edged sword for multinational family business groups from emerging economies and the performance of their affiliates located abroad. We test an integrated framework based on internalization and agency theory on a longitudinal dataset of multinational family business groups from Taiwan. We find evidence for the contingent impact of cultural differences and family management on the association between ownership strategy and affiliate performance. While direct ownership is seen as offering more control over the affiliate, we show that this comes at a performance cost for affiliates in culturally different host countries and affiliates under family management. Indirect ownership seems to be one way to positively influence affiliate performance in culturally distant countries, but seems not to be contingent on family management utilization.

Introduction

We investigate the effects of ownership strategies on foreign affiliate’s performance in multinational family business groups from an emerging economy. We thereby address two gaps in current international business literature. First, with the growing economic importance of emerging markets, new forms of corporate governance emerge that established international business literature struggles to integrate in existing conceptual frameworks (Cumming et al., 2017; Filatotchev and Wright, 2011). For instance, multinational family business groups (MFBGs) surface as the key economic forces from many emerging economies (Singh and Gaur, 2013; Ramamurti and Singh, 2009), and bring with them different ownership and management strategies to control their affiliates abroad (Gaur and Delios, 2015; Singh and Delios, 2017; Singh and Gaur, 2009). How the distinctive governance structure of those MFBGs impacts strategy and performance is a critical issue in international business field (Singh and Delios, 2017; Singh and Gaur, 2009). Second, MFBGs from emerging economies show a more pronounced usage of indirect ownership and family management to control foreign affiliates (Aguilera and Crespi-Cladera, 2016; Morck et al., 2005). Although there is ample of literature on direct ownership stakes and performance in foreign affiliates (e.g. Brouthers, 2002; Gaur and Lu, 2007) existing research often neglects the importance of indirect ownership as a cross border control tool for MFBGs. Existing studies also show little consistency in their findings reaching from positive, negative, to non-significant links between ownership strategy and foreign affiliate performance (e.g., Brouthers, 2002; Contractor et al., 2016; Peng et al., 2008; Shirodkar and Konara, 2017).