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Do global dynamic managerial capabilities affect MNEs' divestments of their overseas subsidiaries?

Year: 2025

Type: article

Abstract: Divestment of foreign subsidiaries by multinational enterprises (MNEs) is a common, yet under-researched phenomenon. The main contribution of this paper is to examine the effects of the global dynamic managerial capabilities (GDMCs) embedded in the top management teams (TMTs) of the MNEs on the likelihood that they will divest their foreign subsidiaries. Following Tasheva and Nielsen (2022), we consider three GDMCs, viz.: international human capital; international social capital, and international managerial cognition. Our empirical analysis confirms that all three GDMCs have significant negative impacts on the likelihood of divestment of foreign subsidiaries (or, equivalently, significant positive impacts on the likelihood of retention of foreign subsidiaries). We also explore the impacts of subsidiary age on the likelihood of retention, and find that longstanding subsidiaries are more likely to be retained than newly-established subsidiaries, and that age enhances the impacts of the three GDMCs.

Source: Journal of International Management

DOI: 10.1016/j.intman.2025.101236

Authors: Ha Nguyen, Roger Strange

Institution: University of Sussex

Language: English

Topic: International Business and FDI

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $4,020