Page 145 - Ebook HTKH 2024

2.4. Moderating effect of global experience
Concerning this paper's central relationships, besides the arguments mentioned
above, it is evident that firms with more extended time operation in a local market can
adapt and better manage the differences in terms of institution and economy between
home and host countries. In turn, the impacts of institutional and economic distance on

local market subsidiaries may be alleviated by experiential MNEs. Hence, we proposed
that global experience moderates the relationship among institutional distance,
economic distance and MNE subsidiary performance.
H4a: Global experience moderates the relationship between cultural distance
and subsidiary performance
H4b: Global experience moderates the relationship between legal institutional
distance and subsidiary performance
H4c: Global experience moderates the relationship between economic distance

and subsidiary performance
3. Methodology
3.1. Data
Data were collected from three main sources. For the performance of MNE
subsidiaries, we use Bloomberg database which a platform designed for financial
professionals that provides real-time and historical market data, news, and analysis,
data about the performance of MNE’s subsidiaries can be collected in a ten years period,
making it possible to do longitudinal research (as mentioned above). For economic

distance, the country's economic data was collected through The Global
Competitiveness Report and a global report published by the World Economic Forum
within the Global Competitiveness Network framework annually. Finally, the data
related to countries’ cultural dimensions were collected through Hofstede-insight with
the country's cultural compass tool, which is the most reputable data source when
employing the Hofstede cultural model.
3.2. Measurements

Social institution distance (Cultural distance)
The current study adopts Hofstede Cultural dimensions measurement, namely:
power distance, individualism, masculinity, uncertainty avoidance, long term
orientation, indulgence.
Accordingly, the distance in terms of each cultural dimension between the parent
firm and its international subsidiary is calculated by cultural indicators of the home

country, subtracts the equivalent cultural indicators of the host country and then collects
the absolute value (as a distance is always a positive real number).
Legal institution distance
The measurement of the legal institutional environment reflects the efficiency and
behavior of both public and private sectors (Klaus Schwab, 1997). Through data
collected from The Global Competitiveness Report (from 2008 to 2018), this paper
relies on a legal and administrative framework to measure each country’s legal
institutional environment in the sample.

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