Corporate Governance in Multinational Corporations: Aligning the Interests of Subsidiaries and Headquarters
Costello, Ayse Olcay
This item is only available for download by members of the University of Illinois community. Students, faculty, and staff at the U of I may log in with your NetID and password to view the item. If you are trying to access an Illinois-restricted dissertation or thesis, you can request a copy through your library's Inter-Library Loan office or purchase a copy directly from ProQuest.
Permalink
https://hdl.handle.net/2142/84514
Description
Title
Corporate Governance in Multinational Corporations: Aligning the Interests of Subsidiaries and Headquarters
Author(s)
Costello, Ayse Olcay
Issue Date
2002
Doctoral Committee Chair(s)
Anju Seth
Department of Study
Business Administration
Discipline
Business Administration
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Business Administration, Management
Language
eng
Abstract
This thesis investigates the corporate governance relationships that exist between multinational corporations' subsidiaries and their headquarters. Parent-subsidiary corporate governance relationships align the interests of the subsidiaries with the interests of the headquarters, and they are represented by the bundles of corporate governance mechanisms of the subsidiaries. Substantial compositional variation can be observed in the bundles of corporate governance mechanisms used in the subsidiaries. In order to deepen our understanding of how corporate governance relationships are designed, it is necessary to explain this compositional variation. In this thesis, it is proposed that the compositional variation in the bundles is configurational. As a result, it is hypothesized that different types of bundles of corporate governance mechanisms, which represent different types of corporate governance relationships, can be identified. In addition, it is proposed that the type of bundle of corporate governance mechanisms adopted by a subsidiary depends on two factors. The first factor is the expected benefits of the corporate governance relationship that the bundle represents, and the second factor is the cost benefit tradeoffs among corporate governance mechanisms that can be used in the bundle. Corporate governance systems of home and host countries for the multinational and the subsidiary, and firm specific factors that represent, environmental, strategic, and structural contingencies are expected to influence these two factors. Therefore, it is hypothesized that the corporate governance systems and firm specific factors help determine the types of bundles that are observed in subsidiaries. To test the framework that is presented in this thesis, the U.S. subsidiaries of foreign multinational corporations are used. The bundle of corporate governance mechanisms that is used in each subsidiary is identified. Cluster analysis is applied to the bundles in order to verify the existence of types of bundles, and to uncover a taxonomy of types of bundles. After the identification of different types of bundles, multicategory logit models are used to test whether the corporate governance systems and the firm specific factors, that are identified in this thesis, help predict the types of bundles that multinationals adopt. The results support the framework developed in this thesis.
Use this login method if you
don't
have an
@illinois.edu
email address.
(Oops, I do have one)
IDEALS migrated to a new platform on June 23, 2022. If you created
your account prior to this date, you will have to reset your password
using the forgot-password link below.
