The Theory and Application of Multinational Corporate Governance by Runhui Lin & Jean Jinghan Chen

Author:Runhui Lin & Jean Jinghan Chen
Language: eng
Format: epub
ISBN: 9789811677038
Publisher: Springer Singapore

6.1.2 Influencing Factors of MNEs Governance at the Meso-Level

Lecraw (1984) analysed the relationship between the bargaining power, ownership, and profitability of MNEs using four main determinants of MNEs’ equity ownership level in subsidiaries: the desired level of equity ownership of MNEs and their subsidiaries, the bargaining power of MNEs, the desired level of equity ownership of local shareholding enterprises in host countries, and the bargaining power of host governments. The study also considered the influence of industry competitors on the equity ownership of subsidiaries. The findings suggest that over time, the actual equity ownership held by MNEs decreases as the attractiveness of the host country weakens and the number of potential multinational investors increases. However, few studies have examined the influencing factors of MNEs governance at the meso-level, and most of these have treated these factors (such as the type of industry, the number of competitors, and the growth rate of the industry) as control variables.

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