Factors affecting subsidiary staffing of Japanese multinationals: a panel data analysis

Global staffing is a crucial factor for the success of the overseas operations of multinational corporations (MNCs). This study examines the contextual and organisational factors that affect the localisation of subsidiary staffing in the overseas operations of Japanese multinational companies. Using panel data containing more than 15 000 observations of Japanese overseas subsidiaries and a random‐effects logit model, we found that the cultural distance between the home country and the host country has a significant impact on the localisation of subsidiary staffing. In addition, the strategic importance of subsidiaries, as well as the local market orientation and business experiences in the host country, but not research and development (R&D) intensity of Japanese parent firms, have a significant impact on the localisation of foreign subsidiary staffing. We discuss the theoretical and practical implications of these findings.