divestment paper 07022021.pdf (461.5 kB)
MNE divestments of foreign affiliates: does the strategic role of the affiliate have an impact?
journal contribution
posted on 2023-06-09, 23:00 authored by Yan Wu, Roger StrangeRoger Strange, Vikrant ShirodkarVikrant ShirodkarDivestments by multinational enterprises (MNEs) of their foreign affiliates are an increasingly important phenomenon in the contemporary global economy. We investigate what determines the likelihood that a foreign affiliate will be divested emphasising, in particular, the strategic roles played by the affiliates within their parent MNEs’ global value chains, and hence the degree of relatedness between the affiliate and the parent firm. We find that poor parent performance and poor affiliate performance are key determinants of affiliate divestment, but that the magnitude of these effects varies significantly depending upon whether the affiliates are in related or unrelated sectors, are horizontal or vertical affiliates, and are located upstream or downstream in the global value chain of their parent MNE.
History
Publication status
- Published
File Version
- Accepted version
Journal
Journal of Business ResearchISSN
0148-2963Publisher
ElsevierExternal DOI
Volume
128Page range
266-278Department affiliated with
- Strategy and Marketing Publications
Full text available
- Yes
Peer reviewed?
- Yes