Not all threats are equal: symbolic and realistic threats and the deployment of parent-country nationals

Fiona Kun Yao, Jing Yu Yang*, Song Chang, Jane Wenzhen Lu

*Corresponding author for this work

Research output: Contribution to journalJournal articlepeer-review

Abstract

Through extending the psychological approach to threats, we advance a threat–contingency model to understand how two domains of host-country threats–symbolic and realistic–drive multinational enterprises (MNEs) to deploy parent-country nationals to manage their foreign subsidiaries. When faced with symbolic threats related to ethics and morals in a host country, MNEs act rigidly and conservatively, increasing the likelihood of deploying parent-country nationals as executives in foreign subsidiaries. When dealing with realistic threats associated with potential economic losses in a host country, however, MNEs are adaptive, decreasing the tendency to transfer parent-country nationals abroad and increasing the use of host-country nationals in foreign subsidiaries. The two threats interact in affecting staffing decisions. Moreover, industry globalization moderates asymmetrically the influences of the two threats: globalization strengthens the effect of symbolic threats but weakens the effect of realistic threats. We used a primary archival study and supplementary laboratory studies to test our hypotheses. Overall, our study provides an additional theoretical account to explain MNEs’ divergent responses toward two domains of threats in a host country. We conclude the study with implications for international business and global mobility research.

Original languageEnglish
JournalJournal of International Business Studies
DOIs
Publication statusPublished - Nov 2023

Scopus Subject Areas

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

User-Defined Keywords

  • Multinational enterprises (MNEs)
  • Symbolic threats
  • Realistic threats
  • Industry globalization
  • Global mobility

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