Multinational Corporation Subsidiary Roles Evolution Research

The important change of the world economics is the continuously spread ofForeign Direct Investment (FDI) and quick development of MultinationalCorporation (MNC). The MNC has substituted the international trade and become theengine of economic growth. The MNC plays an important role in the promotingeconomics. Under the context of economic globalization and China entry of WTO,the Chinese enterprises should seize the good opportunity and face the challenge. TheChinese enterprises should not only attract the FDI investment, but also invest abroad.They could make use of the domestic and abroad resources and its comparativeadvantage only until they actively embed the external networks of MNCs in Chinaand the local commercial networks of host countries. Only by this way can theygrow up quickly to a large-scale MNC with strong international competitivecapability.Aiming at this problem, this paper focused on the subsidiary, according toknowledge exchange density of inter-network and outer-network and the intensity oflinkage, classify subsidiary into three types: local implementor, specializedcontributor and world mandate, from the angle of network view. By the review ofresearching literatures on the evolution of MNC subsidiary roles, this paper discussesthe evolution mechanism of MNC subsidiary, including the evolutionary paths,driven-factors and corresponding governance mechanisms. The final aim of this paperis to put forward practical guidelines for Chinese enterprises on attracting FDI andinvesting abroad.This paper includes 6 chapters.Chapter 1 is introduction. It includes several parts such as the background of thisresearch, the research aim and method, the main contents of this paper, possiblecreative thinking and so on.Chapter 2 is literature review. This chapter summarizes the related literature onMNC subsidiary's roles. It includes the development of headquarter-subsidiaryrelationship theory, the theories of classification of subsidiary's roles and the evolutionary theory of MNC subsidiary's roles. On the basis of the analysis of MNCnetwork organization.Chapter 3 takes the subsidiary as the research focus and discusses theclassification of subsidiary in MNC network. According to knowledge exchangedensity of inter-network and outer-network and the intensity of linkage, the MNCsubsidiary is classified into three types: local implementor, specialized contributorand world mandate. In combination of above classification, it discusses the dynamicevolutionary path and evolutionary driven factors of the MNC subsidiary. Meanwhile,it applies the agency theory into the research on evolution of MNC subsidiary rolesand discusses the construct of differentiated fit of subsidiary governance mechanismsin MNC network.Chapter 4 takes the subsidiary of Motorola in China and the subsidiary of Haierin America as the samples of cases analysis, and puts forward the countermeasuresand suggestions for internationalization of Chinese enterprises.Chapter 5 summarizes the results of this paper and proposes the implication ofthe research.