Subsidiary expansion/contraction during times of economic crisis

Chris Changwha Chung, Seung Hyun Lee, Paul W. Beamish, Takehiko Isobe

Research output: Contribution to journalArticlepeer-review

124 Citations (Scopus)


This paper compares two real options - within-country growth and across-country operational flexibility - to examine subsidiary expansioncontraction during times of economic crisis. Specifically, we examine how the real options orientations of individual subsidiaries interact with the general characteristics of multinational enterprise networks. Our main findings are that: (a) economic crises can be detrimental for subsidiaries with stronger within-country orientations, and advantageous for those with stronger across-country orientations; and (b) network characteristics are not the sole determinants of subsidiary expansioncontraction - what really matters is how the real options orientations of individual subsidiaries mesh with the overall characteristics of the network they belong to.

Original languageEnglish
Pages (from-to)500-516
Number of pages17
JournalJournal of International Business Studies
Issue number3
Publication statusPublished - 2010 Apr


  • Across-country operational flexibility
  • Economic crisis
  • MNE network characteristics
  • Real options
  • Subsidiary expansion
  • Within-country growth

ASJC Scopus subject areas

  • Business and International Management
  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Strategy and Management
  • Management of Technology and Innovation


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