Abstract: Drawing on parenting advantage and institutional theories, this article investigates how emerging multinational enterprise (EMNE) headquarters’ ability to manage institutional voids influences subsidiary performance and how this relationship is moderated by host-country experience and institutional distance. Findings from an analysis of panel data on 353 Chinese EMNEs and their 3,394 foreign subsidiaries from 2012 to 2020 show that headquarters’ ability to manage institutional voids improves subsidiary performance. This positive effect becomes stronger with greater host-country experience. Formal institutional distance weakens the positive effect of the capability to manage institutional voids, whereas informal institutional distance shows no significant moderating effect.
Liu et al. (Sun,) studied this question.