Li, X ORCID: 0000-0002-7417-2556, Sun, L and Zhang, Y (2018) Industry agglomeration, subnational institution and foreign film performance. Management International Review. ISSN 1861-8901

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Abstract

This study investigates the impact of industry agglomeration and its interaction with sub-national institutions on the profitability of multinational enterprises (MNEs) subsidiaries operating in an emerging economy. We argue that in an emerging economy like China, competition in product and factor markets is more intense between foreign firms than between foreign and domestic firms owning to market segmentation. Consequently, industry agglomeration with other foreign firms has negative impact on the profitability of foreign subsidiaries. In contrast, foreign firms agglomerating with domestic firms may reap gains owning to less competition and improved access to local resources and knowledge. We find that these effects are more pronounced to domestic-market-oriented foreign firms. Furthermore, sub-national institutions moderate the relationships between industry agglomeration and the profitability of foreign firms. Our arguments are supported by the empirical analysis based on a comprehensive dataset of foreign firms operating in China over the period from 1999 to 2005.

Item Type: Article
Additional Information: This is the accepted author manuscript (AAM). The final published version (version of record) is available online via Springer at http://doi.org/10.1007/s11575-018-0361-3 - please refer to any applicable terms of use of the publisher.
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions: Faculty of Humanities and Social Sciences > Keele Management School
Depositing User: Symplectic
Date Deposited: 13 Aug 2018 08:33
Last Modified: 02 Oct 2018 08:38
URI: http://eprints.keele.ac.uk/id/eprint/5217

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