Article

 

The Role of Country, Industry and Firm Specific Effects on the Autonomy of a Multinational Corporation’s Subsidiary in Central and East European Countries (p.101-133)

by

Hannula Helena, Faculty of Economics and Business Administration, University of Tartu (Estonia)

Männik Katrin, Faculty of Economics and Business Administration, University of Tartu (Estonia)

Varblane Urmas, Faculty of Economics and Business Administration, University of Tartu (Estonia)

Keywords : subsidiary strategy, MNC subsidiary autonomy, multidimensionality of subsidiary autonomy, Central and East Europe

JEL classification : F23, O30, O57

Abstract

This paper examines the country, industry and firm specific effects on the autonomy of multinational corporation’s subsidiaries across business functions in Estonia, Hungary, Poland, Slovakia and Slovenia. The novelty of the paper is in the deeper opening of the multidimensionality of the autonomy. Using the method of principal component four factors of autonomy are obtained: technology, marketing, management and finance. To analyse the country, industry and firm specific effects on the autonomy the analysis of variance (ANOVA) and multivariate analysis of variance (MANOVA) is used. Multivariate analyses helped us to show that autonomy of foreign subsidiaries is positively dependent on the level of economic development level of the host country. Also, subsidiaries in high technology intensity sectors are more closely engaged in corporate networks and are less autonomous.