Subsidiary-level outcomes of expatriate staffing: an empirical examination of mnc subsidiaries in the USA

Abstract

This study examines the relationship between expatriate staffing levels and subsidiary performance among the US subsidiaries of foreign companies headquartered in Europe and Japan. Expatriate staffing is hypothesised to be indirectly related to subsidiary performance - through its differential impact on four globally versus locally desired outcomes. Drawing from the MNC strategy literature, it is argued that expatriate staffing in subsidiaries will be positively related to subsidiaries' degree of shared vision with and the amount of knowledge transferred from their parent companies, but negatively related to their ability to become locally responsive to and their level of local adaptation to host markets. Based on liability of foreignness theory, these four intermediate mechanisms are proposed to be positively related to subsidiary performance. Results support some of the hypotheses and offer several new insights into the international staffing literature.