'Does Country Matter' - Summary and Critque Essay

'Does Country Matter' - Summary and Critque - Essay Example a) The question is, how much does country difference actually explain the variations in achievements of foreign affiliates To answer this, the elements they defined were as follows: Country effects, Industry effects, Multinational Corporation (MNC) effects, Affiliates effects and the Years observed, analyzing these to see how they all contributed to the average return or business success achieved by the foreign affiliates. They hypothesized that country had an important role to play and had not been explored fully in earlier research. b) Methodology The study is described as unique by the researchers because it uses performance of foreign affiliates as the primary unit of analysis, the country effects variables contained in it, and non-U.S. data, only Japanese MNCs. Data was taken from the Trend Survey of Overseas Business Activities (Trend Survey), annually conducted by the Japanese Ministry of Economy, Trade and Industry. The companies used were: either subsidiary (MNC has 10% capital invested),sub-subsidiary (MNC has 50% invested) or where a sub-subsidiary has 50% capital invested in the foreign affiliate company. 12,000 total, over 6 years were examined, using 616 c) Results and conclusions suggest that country effects are almost as great as industry effects, implying that the host country has great impact when determining performance, wi