• Direct and Indirect Effects of Intra- and Inter-Organizational Social Capital on the Initiative Performance of MNE Subsidiaries

Abstract

The purposes of this article is to develop a integrate model to analyze the effects of social capital on inside- and outside- resource exchange and combination, and on initiative performance, of MNE’s subsidiaries. The results of simple correlation analysis and structural equation models (SEM) show that the relationship among intra-social capital, inter-social capital, inside resource exchange and combination, outside resource exchange and combination, and initiative performance, of MNE’s subsidiaries, are all positive and significant. However, the relationship between intra-organizational social capital and outside resource exchange and combination, and between inter-organizational social capital and inside resource exchange and combination, are both negative and significant. The results suggest that MNE’s subsidiaries are embeddedness in intra- and inter- organizational networks that are coexistent. Through exchanging with and combining the resources of inter- and inter- organizational networks, MNE’s subsidiaries can increase their initiative performance significantly. However, there is a trade-off between intra- and inter- resource exchange and combination.

Keywords: Social Capital, Resource Exchange and Combination, Subsidiaries’ Initiation