Competence Development through Business Relationships or Competitive Environment? - Subsidiary Impact on MNC Competitive Advantage

This paper examines the question as to whether two alternate environmental factors -competence development in subsidiary business relationships and competitive pressure of the subsidiary business environment -relate to the impact of subsidiaries on the competence development and performance of the larger MNC organisation. Using data from 501 foreign-owned MNC subsidiaries in three Nordic countries; Sweden, Finland and Denmark, the paper develops and tests four hypotheses using the Lisrel package.