Quotation Mohr, Alexander, Konara, Palitha, Ganotakis, Panagiotis. 2020. Explaining the performance of divested overseas subsidiaries. International Business Review. 29 (1)




We examine the post-divestment performance of subsidiaries that have been divested by their foreign owners and have subsequently been acquired by domestic owners. Drawing on Hymer’s classic explanation of firm internationalization and on the resource-based view dimension of internalization theory, we suggest that the differences in terms of the degree to which FSAs are independent from the linkages to the parent firm will be reflected in the variation in the performance effect of a foreign-to-domestic sale of the business. We argue that the negative performance effect of a foreign-to-domestic sale of a subsidiary is lower (1) for older subsidiaries, (2) for subsidiaries oriented toward the domestic, and (3) when the foreign parent firm is located outside the subsidiary’s geographic region. By using propensity score matching and difference-in-differences estimations, we examine the proposed effects and provide novel insights on the performance implications of the foreign-to-local ownership changes.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal International Business Review
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new STRAT-B, WH-B
Language English
Title Explaining the performance of divested overseas subsidiaries
Volume 29
Number 1
Year 2020
URL https://www.sciencedirect.com/science/article/pii/S0969593119300617
DOI https://doi.org/10.1016/j.ibusrev.2019.101602
Open Access N


Mohr, Alexander (Details)
Ganotakis, Panagiotis (University of Liverpool, United Kingdom)
Konara, Palitha (University of Sussex, United Kingdom)
Institute for International Business (Mohr) (Details)
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