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MNE divestments of foreign affiliates: does the strategic role of the affiliate have an impact?

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posted on 2023-06-09, 23:00 authored by Yan Wu, Roger StrangeRoger Strange, Vikrant ShirodkarVikrant Shirodkar
Divestments by multinational enterprises (MNEs) of their foreign affiliates are an increasingly important phenomenon in the contemporary global economy. We investigate what determines the likelihood that a foreign affiliate will be divested emphasising, in particular, the strategic roles played by the affiliates within their parent MNEs’ global value chains, and hence the degree of relatedness between the affiliate and the parent firm. We find that poor parent performance and poor affiliate performance are key determinants of affiliate divestment, but that the magnitude of these effects varies significantly depending upon whether the affiliates are in related or unrelated sectors, are horizontal or vertical affiliates, and are located upstream or downstream in the global value chain of their parent MNE.

History

Publication status

  • Published

File Version

  • Accepted version

Journal

Journal of Business Research

ISSN

0148-2963

Publisher

Elsevier

Volume

128

Page range

266-278

Department affiliated with

  • Strategy and Marketing Publications

Full text available

  • Yes

Peer reviewed?

  • Yes

Legacy Posted Date

2021-02-09

First Open Access (FOA) Date

2021-02-09

First Compliant Deposit (FCD) Date

2021-02-09

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