Reverse asymmetry: Agency in advanced economy subsidiaries of emerging market multinational enterprises

This study examines how employees of German subsidiaries respond to practice transfers from headquarters of Chinese multinational enterprises (MNEs). Drawing from an institutional and capabilities lens, we find that subsidiary employees derive agency from the context of an advanced economy subsidiary of an emerging economy MNE. In this context, the subsidiary tends to have stronger capabilities than the parent company, and there is a large parent–subsidiary institutional distance. Subsidiary agency ranges from constructive reframing of attempted practice transfers toward desired outcomes (constructive agency) to attempts at resisting the transfers (resistance agency). An extreme form of resistance is gatekeeping, requiring subsidiary consent to the practice transfer (gatekeeper agency). Resistance-oriented forms of agency appear more likely when subsidiaries have considerable capability advantages and institutional differences between parent and subsidiaries are particularly large. Other factors not specific to the emerging economy MNE context also affect the nature of agency: Constructive forms of agency are more feasible when relations between parent and subsidiary are good, while gatekeeper agency is specific to acquisitions.