Integrating distance research with the behavioral strategy literature on MNC headquarters-subsidiary relations, this paper explores how the distance between headquarters and subsidiaries relates to value added by the headquarters. We show for 124 manufacturing subsidiaries in Europe that, on average, distance is unrelated to value added by headquarters but that this effect is contingent upon the extent to which the subsidiary is locally embedded. Only after a certain threshold level of subsidiary embeddedness, distance is negatively related to headquarters value added. This effect is more pronounced for cultural, economic, and administrative distances than for pure geographic distance, highlighting the critical role of contextual variation for MNCs.
Österreichische Systematik der Wissenschaftszweige (ÖFOS)
- 509018 Wissensmanagement
- 505027 Verwaltungslehre
- 502052 Betriebswirtschaftslehre
- 506009 Organisationstheorie
- 502044 Unternehmensführung
- 507026 Wirtschaftsgeographie