Quotation Gugler, Klaus, Mueller, Dennis C., Peev, Evgeni, Segalla, Esther. 2013. Institutional determinants of domestic and foreign subsidiaries' performance. International Review of Law and Economics 34, 88-96.


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Abstract

This article investigates the determinants of subsidiaries' profitability using a unique dataset of more than 23,000 listed and unlisted subsidiaries worldwide over the period 1994-2005. We find that profitable parent companies are able to transfer some of the intangible assets that make them profitable to their subsidiaries. Our results indicate that good institutions (measured by the Worldwide Governance Indicators) are associated with better performance for companies' subsidiaries. When we categorize countries in terms of the origins of their legal systems, we also find that this dimension of institutional quality is generally associated with better performance. Controlling for both legal origins and country governance institutions, we find that both sets of institutions are significantly related to subsidiaries' performance, and that there is an overlap in their explanatory power.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal International Review of Law and Economics
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, STRAT-B, WH-B
Language English
Title Institutional determinants of domestic and foreign subsidiaries' performance
Volume 34
Year 2013
Page from 88
Page to 96
Reviewed? Y
URL http://www.sciencedirect.com/science/article/pii/S0144818813000100
DOI http://dx.doi.org/10.1016/j.irle.2013.01.003

Associations

People
Gugler, Klaus (Details)
External
Mueller, Dennis C. (Universit├Ąt Wien, Austria)
Peev, Evgeni (Universit├Ąt Wien, Austria)
Segalla, Esther (Oesterreichische Nationalbank, Austria)
Organization
Research Institute for Regulatory Economics FI (Details)
Institute for Quantitative Economics IN (Details)
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