Initiative and networks as determinants of competence levels in foreign-owned subsidiaries: evidence from Taiwan

Abstract

This paper investigates the roles of subsidiary initiative dimensions and networks in the competence creation process in Taiwan-based foreign-owned subsidiaries. Based on a survey of over 100 foreign-owned subsidiaries in Taiwan, the study finds that subsidiary initiative dimensions are positively associated with competence levels in subsidiaries. Network relationships as such are not associated with competence, but play a role when considered in combination with subsidiary initiative dimensions. Our findings suggest that initiative dimensions and networks have distinct impacts on competence levels in subsidiaries, but do also moderate each other. The article also has valuable policy implications for the attraction of high competence foreign direct investment into emerging economies.