Marketing strategy antecedents of value adding by foreign subsidiaries

摘要

Purpose - The purpose of this paper is to extend the knowledge of marketing strategy antecedents ofrnindustrial value adding in foreign markets. It attempts to answer the following two questions: how isrnthe marketing strategy of a foreign subsidiary associated with the extent of its value-adding activity?rnIs there an association between the extent of value-adding activity and financial performance of thernsubsidiary?rnDesign/methodology/approach - A model is developed and hypotheses are tested. Data arerncollected from 191 subsidiaries of Swedish manufacturing firms in Germany, the UK, and the USA.rnFindings - Product-market breadth and market experience positively affect the extent of foreign valuernadding. Also, market experience has a moderating effect and strengthens the positive associationrnbetween product-market breadth and the extent of value adding. A foreign subsidiary's financialrnperformance is positively associated with the number of value-adding activities of the subsidiary.rnResearch limitations/implications - The study shows that the marketing strategy of a foreignrnsubsidiary needs to be acknowledged to understand the antecedents of foreign value-adding activity.rnIn addition, the extent of value-adding activity contributes to the implementation of an effectiverninternational strategy.rnPractical implications - An industrial firm wanting to implement an effective internationalrnmarketing strategy needs to pay attention to the links between the marketing strategy of a foreignrnsubsidiary and the extent of the subsidiary's value-adding activity.rnOriginality/value - The study is unique in that it applies a subsidiary perspective and focuses onrnforeign subsidiary strategy associations. The study both extends the common approach, which arguesrnthat the value adding of a foreign subsidiary is determined only by the corporate marketing strategy,rnand explores associations with foreign subsidiary performance.