Subsidiary Activities: Parent Company and Local Predictors of Business Resilience

Abstract

Objective – Resilience is one of the most relevant aspects of business today. Taking action for resilience requires new ideas that embrace uncertainty and consider adaptations for absorbing environmental pressures and responding to unidentified risks. The present study empirically explores the efforts of foreign subsidiaries in the United States. Methodology – The analysis focuses on firms' activities across states. Parent company scale and performance, local market size, labor availability, and presence of other foreign firms are investigated in their power to discriminate between resilience activities and non-resilience actions. Findings – The results show the relative significance of overall parent performance in determining a subsidiary's resilience at a particular subnational location. Novelty – This study's focus on resilience activities and their determinants are unique. Original outcomes guide local actions for increasing business agility and inform multinational companies' executives about the importance of generating adequate business performance in preparation for disruption and supporting affiliates' resilience at their localities. Type of Paper: Empirical JEL Classification: F23; E66 Keywords: Resilience, Subnational Location; Foreign Subsidiary; a Multinational Company Reference to this paper should be made as follows: Wright, R. (2022). Subsidiary Activities: Parent Company and Local Predictors of Business Resilience, J. Bus. Econ. Review, 7(2), 127–140. https://doi.org/10.35609/jber.2022.7.2(2)