Journal of International Business Studies

, Volume 38, Issue 7, pp 1095–1112

On the growth of foreign affiliates: multinational plant networks, joint ventures, and flexibility

Article

DOI: 10.1057/palgrave.jibs.8400319

Cite this article as:
Belderbos, R. & Zou, J. J Int Bus Stud (2007) 38: 1095. doi:10.1057/palgrave.jibs.8400319

Abstract

We take a flexibility perspective to analyse employment growth in a large sample of Japanese manufacturing affiliates in nine Asian countries during the years leading up to and into the Asian financial crisis (1995–1999). We find that joint ventures are less flexible than wholly owned affiliates in responding to changing environmental conditions in the focal country, and underperform in high-growth environments. Multinational enterprises (MNEs) use the flexibility created by their multinational plant network to adjust affiliate employment in response to labour cost changes in other countries in which they operate plants. However, no evidence was found that the presence of joint ventures in multinational plant networks reduces this network flexibility. Our findings suggest that more research is needed on the heterogeneous responses of MNEs and their affiliates to changing economic environments.

Keywords

affiliate growth joint ventures plant networks flexibility 

Copyright information

© Academy of International Business 2007

Authors and Affiliations

  1. 1.Department of Managerial EconomicsStrategy and Innovation, Katholieke Universiteit LeuvenBelgium
  2. 2.Department of Technology ManagementTechnische Universiteit EindhovenThe Netherlands
  3. 3.Fortis Bank NVBrusselsBelgium