The Impact of the Integration-Responsiveness Strategy on the Performance of Foreign Subsidiaries in Korea

With a sample of 142 Korean subsidiaries of multinational enterprises (MNEs), this study explores the relationship between the integration-responsiveness (IR) strategy and foreign subsidiary performance. In the present study, we insist that local subsidiaries may enhance a higher performance when these subsidiaries show matching characteristics with a transnational strategy in the IR framework. Hence, we analyzed four determinants of the international interdependence and diversifications portfolio for global integration (GI) and production localization and environmental adaptation for local responsiveness (LR). The results show that international interdependence, production localization, and environmental adaptation are positively and significantly related to subsidiary performance. However, unexpectedly, the diversification portfolio is insignificantly related to subsidiary performance.