Can Parents Be Attributed to their Subsidiary Performance?
$ 38.5
Description
In Pakistan, international firms are highly active as Pakistan serves them huge market for their products. This foreign business investment, in turn have a huge impact on bilateral economic development. Subsidiaries performance is crucial in this scenario, and strategies affecting it mostly undertake Pakistan related attributes while international firms ignore Parent countries attributes. While a third level attribute has been missing, that is, how subsidiary performance in Pakistan is affected by Governance indicators in Pakistan and Parent (international) countries. To address this gap we construct a multi-level research that focuses the subsidiary, parent attributes along with countries’ Governance Indicators while predicting the determinants of subsidiary performance in Pakistan. As international firms are highly sensitive to the performance of their subsidiaries and want to understand the factors behind their monetary success. We use two different levels i.e. parent & subsidiary level; multi-level analysis approach with HLM (Hierarchical Linear Model) in this research paper. Governance indicators of both parents and subsidiaries were taken explanatory factors along with Market growth, size, Performance, R & D, capital structure as well as asset management policies of parent. Subsidiary level factors included parents’ ownership, size, equity, and capital investment, covering ten sectors of Pakistan Stock Exchange.