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Explaining the performance of divested overseas subsidiaries
journal contribution
posted on 2023-06-09, 19:10 authored by Alex Mohr, Palitha Konara, Panagiotis GanotakisWe examine the post-divestment performance of subsidiaries that have been divested by their foreign owners and have subsequently been acquired by domestic owners. Drawing on Hymer’s classic explanation of firm internationalization and on the resource-based view dimension of internalization theory, we suggest that the differences in terms of the degree to which FSAs are independent from the linkages to the parent firm will be reflected in the variation in the performance effect of a foreign-to-domestic sale of the business. We argue that the negative performance effect of a foreign-to-domestic sale of a subsidiary is lower (1) for older subsidiaries, (2) for subsidiaries oriented toward the domestic, and (3) when the foreign parent firm is located outside the subsidiary’s geographic region. By using propensity score matching and difference-in-differences estimations, we examine the proposed effects and provide novel insights on the performance implications of the foreign-to-local ownership changes.
History
Publication status
- Published
File Version
- Accepted version
Journal
International Business ReviewISSN
0969-5931Publisher
ElsevierExternal DOI
Issue
1Volume
29Article number
a101602Department affiliated with
- Strategy and Marketing Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2019-09-26First Open Access (FOA) Date
2021-04-16First Compliant Deposit (FCD) Date
2019-09-26Usage metrics
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