Sequential entry timing and the survival of MNC subsidiaries

This study examines the effect of multinational corporation (MNC) sequential subsidiary entry timing on subsidiary survival. It draws on Edith Penrose’s (1959) theory of the growth of the firm. We hypothesize a U-shaped relationship between the interval between the focal subsidiary and the previous entry and the likelihood of exit of the focal subsidiary. We further hypothesize that the U-shaped relationship is moderated by subsidiary size, parent firm size, the number of parent firm subsidiaries, parent firm host country experience, and parent firm general international experience. All hypotheses were supported. Our results suggest that the theory of the growth of the firm should be placed center stage in entry timing research since it not only reconciles the conflicting insights from the frequently used resource-based view and “entry timing effects” perspectives, but also serves to bring entry timing research away from the static one-time entry thinking and back to the big picture of firm growth.