Case-study on the evolution of MNE subsidiaries in their local host environment: An evolutionary analysis of Japanese MNE subsidiaries in the Northwing of the Randstad

Abstract

This thesis contributes to research on the long-term dynamics of MNE subsidiary evolution using an Evolutionary Economic Geography (EEG) approach. This thesis explores how the evolution of Japanese subsidiaries that are located in the Northwing is characterised and what determines their evolutionary paths. According to EEG, subsidiaries co-evolve with their local host environment. The interaction between the two constitutes certain routines, which influence decision made by subsidiaries and subsequently, their actual development. A longitudinal design and a case study design have been applied for the empirical research in this thesis. The former consists of a database that has been developed for this thesis, providing data about all Japanese subsidiaries present in the Northwing in the period 2000-2009. The latter consists of in-depth, semi-structured interviews with eleven Japanese subsidiaries’ directors and four key informants on the objects researched. Japanese subsidiaries in the Northwing are found to be heterogeneous in their main activities and industries, not changing much their activities over time. Also, their mandates, in terms of product and market scope, generally increase over time. An upcoming trend observed is a strategy based on local orientation, which indicates that relationships with external actors present in the subsidiary’s local host environment are important. However, the role of the local host environment in subsidiary evolution is interpreted differently by Japanese subsidiaries.