Local Density and Foreign Subsidiary Performance
Year: 2006
Type: article
Abstract: Local density (the number of firms vying for similar resources in a local environment) has been overlooked in explaining foreign subsidiary performance. This study drew upon the concepts of liability of foreignness and density dependence to examine how local density within a host country affected performance—directly and indirectly— through effects on market experience and strategic conformity. We found that local density was negatively related to foreign subsidiary performance and that market experience was less beneficial in high-density environments. Strategic conformity enhanced performance in low-density environments but adversely affected performance in high-density environments.
Source: Academy of Management Journal
Authors: Stewart R. Miller, Lorraine Eden
Institutions: The University of Texas at Austin, Texas A&M University
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3121944685