Configurational characteristics of mandate portfolios and their impact on foreign subsidiary survival (vol 54, 100999, 2019)

초록

The authors regret that the coefficients, standard errors, significance, and hazard ratio were not correctly displayed during the publication process. Accordingly, it requires a few changes in the results section as well. However, the key conclusions and the messages of empirical results remain unchanged. The authors would also like to clarify that the entire document does not represent corrections. <Original version> (We underline the parts that have to be corrected) Table 3 presents standardized coefficients of the Cox proportional hazard analysis. In Model 1, we included only our control variables. As expected, subsidiary age, subsidiary profitability, subsidiary ownership, parent firm profitability, host country size and host country potential all show positive and significant impacts on subsidiary survival. The next three models consider the direct impacts of relative scope, mandate overlap, and global value-chain integration on survival, respectively. In Model 2, we included the first independent variable, the relative scope of subsidiary mandate portfolio, to test the first hypothesis. The coefficient of the portfolio's relative scope is −0.10, and it is statistically significant (p < 0.05). The negative and significant coefficient supports the first hypothesis and the result is consistent throughout the remaining models. Model 5 includes the main effects of the three independent variables. Model 6 and 7 add two interaction terms, respectively. For a precise discussion pertaining to the hypotheses, we interpret our results using hazard ratio as shown in Table 4, which denotes the percentage change in the hazard with each unit change in the predictor. In Model 8, the relative scope of a mandate portfolio shows the hazard ratio of 0.90 (β = −0.11, p < 0.05), suggesting that the survival likelihood of a subsidiary increases with an increase in the scope of the subsidiary's mandate portfolio in relation to the average number of mandates conducted by same-parent subsidiaries. Hypothesis 2, predicting a lower chance of survival, given an interaction between the relative scope and the subsidiary's mandate overlap, is supported (β = 0.15, p < 0.05). While the relative scope of a mandate portfolio alone exhibits the hazard ratio of 0.90 for the risk of subsidiary exit, the hazard ratio of 1.16 for the interaction term suggests that a subsidiary's chances of survival significantly decrease when the scope of the mandate portfolio has overlapping mandates. As shown in Figure 1, subsidiaries with low levels of relative scope exit at similar rates regardless of overlap. With high relative scope, in line with our prediction, exit rates increase as overlap increases. Hypothesis 3, predicting higher chances of survival, given an interaction between the relative scope and the subsidiary's level of global value-chain integration, is supported (β = −0.35, p < 0.01). The interaction term exhibits the hazard ratio of 0.70, which shows higher chances of survival when compared with the effect of the relative scope alone. Figure 2 shows that when relative scope is high, subsidiaries with high global orientation shows lower exit rates than those with low global orientation. Therefore, all of our hypotheses are confirmed through empirical tests. <Corrected version> (We underline the corrected parts) Table 3 presents standardized coefficients of the Cox proportional hazard analysis. In Model 1, we included only our control variables. As expected, subsidiary age, subsidiary profitability, subsidiary ownership, parent firm profitability, host country size and host country potential all show positive and significant impacts on subsidiary survival. The next three models consider the direct impacts of relative scope, mandate overlap, and global value-chain integration on survival, respectively. Model 5 includes the main effects of the three independent variables. Model 6 and 7 add two interaction terms, respectively. The coefficient of the portfolio's relative scope is −0.106, and it is statistically significant (p < 0.05) in Model 8, indicating that subsidiaries with higher level of relative scope are less likely to exit, providing support for the first hypothesis. For a precise discussion pertaining to the hypotheses, we interpret our results using hazard ratio as shown in Table 4, which denotes the percentage change in the hazard with each unit change in the predictor. In Model 8, the relative scope of a mandate portfolio shows the hazard ratio of 0.899 (β = −0.106, p < 0.05), suggesting that the survival likelihood of a subsidiary increases with an increase in the scope of the subsidiary's mandate portfolio in relation to the average number of mandates conducted by same-parent subsidiaries. Hypothesis 2, predicting a lower chance of survival, given an interaction between the relative scope and the subsidiary's mandate overlap, is supported (β = 0.149, p < 0.05). While the relative scope of a mandate portfolio alone exhibits the hazard ratio of 0.899 for the risk of subsidiary exit, the hazard ratio of 1.160 for the interaction term suggests that a subsidiary's chances of survival significantly decrease when the scope of the mandate portfolio has overlapping mandates. As shown in Figure 1, subsidiaries with low levels of relative scope exit at similar rates regardless of overlap. With high relative scope, in line with our prediction, exit rates increase as overlap increases. Hypothesis 3, predicting higher chances of survival, given an interaction between the relative scope and the subsidiary's level of global value-chain integration, is supported (β = −0.352, p < 0.01). The interaction term exhibits the hazard ratio of 0.703, which shows higher chances of survival when compared with the effect of the relative scope alone. Figure 2 shows that when relative scope is high, subsidiaries with high global orientation shows lower exit rates than those with low global orientation. Therefore, all of our hypotheses are confirmed through empirical tests. Table 3 Coefficient estimates of Cox proportional hazard analyses predicting divestment rate. [Table presented] Robust standard errors in brackets *** p < 0.01, ** p < 0.05, * p < 0.1. Table 4 Hazard ratio of Cox proportional hazard analyses predicting divestment rate. [Table presented] Robust standard errors in brackets *** p < 0.01, ** p < 0.05, * p < 0.1. The authors would like to apologise for any inconvenience caused. © 2020 Elsevier Inc.