Identity, community, and audience: How wholly owned foreign subsidiaries gain legitimacy in China

Jiatao Li, Jing Yu Yang, Deborah R. Yue

Research output: Journal PublicationArticlepeer-review

115 Citations (Scopus)

Abstract

Conceptualizing different foreign entry modes as distinct organizational forms, we examine how wholly owned foreign subsidiaries (WOFSs) gain legitimacy in a host country. Drawing on the institutional and ecological perspectives, we build a legitimation framework based on the ideas of identity, community, and audience. Specifically, we identify dual sources of legitimating influences for these subsidiaries in China in 1979-95: foreign direct investment (FDI) communities, and host country public opinion. Our findings reveal that the legitimation and competition dynamics of FDI communities and Chinese acceptance of the organizational form both influenced adoption of wholly owned foreign subsidiaries in China.

Original languageEnglish
Pages (from-to)175-190
Number of pages16
JournalAcademy of Management Journal
Volume50
Issue number1
DOIs
Publication statusPublished - Feb 2007
Externally publishedYes

ASJC Scopus subject areas

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

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