Journal of International Business Studies
Volume 41, Issue 3, April 2010, pp 500–516  
 

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Chris Changwha Chung; Seung-Hyun Lee; Paul W Beamish; Takehiko Isobe

https://link.springer.com/article/10.1057/jibs.2009.72

Abstract
This paper compares two real options – within-country growth and across-country operational flexibility – to examine subsidiary expansion/contraction during times of economic crisis. Specifically, we examine how the real options orientations of individual subsidiaries interact with the general characteristics of multinational enterprise networks. Our main findings are that: (a) economic crises can be detrimental for subsidiaries with stronger within-country orientations, and advantageous for those with stronger across-country orientations; and (b) network characteristics are not the sole determinants of subsidiary expansion/contraction – what really matters is how the real options orientations of individual subsidiaries mesh with the overall characteristics of the network they belong to.

Keywords
subsidiary expansion;
economic crisis;
real options;
across-country operational flexibility;
within-country growth;
MNE network characteristics