MNE Headquarters Disaggregation: The Formation Antecedents of Regional Management Centers

This research examines region-bound headquarters disaggregation in multinational enterprises (MNEs). We link the formation of regional management centres – both dedicated regional headquarters (RHQs) and regional management mandates (RMMs) granted to operating subsidiaries – to the complexity argument underlying organizational information processing theory. We demonstrate how different dimensions of complexity associated with the number and dispersion of an MNE's subsidiary network in a focal region affect whether, and in which form, region-bound headquarters disaggregation takes place. Additionally, we consider boundary conditions affecting RMC formation based on within-region experience, global MNE footprint, and between-region effects. Empirically, we utilize a large global dataset of Japanese MNE foreign investments between 1992 and 2014, which allows us to perform event history analyses.