Stay or Leave: Nationalist Movement Against Foreign
Subsidiaries’ Parent Country and Local Managers’ Exits
Prof. Wenjie LIU
Assistant Professor of Management, City University of Hong Kong
Date: 17 October 2024 (Thursday)
Time: 10:30 to 12:00
Venue: E22-G008
Host: Prof. Jacky Fok Loi HONG, Professor in Management
Abstract
Recent research has explored how nationalism impacts business practices and how firms leverage nationalism in their strategies. However, less attention has been directed to its influence on identity-based liability of foreignness for managers. By highlighting the dual identities of local-born managers working in foreign firms, we study how nationalist movements shape identity-based liability spillover from foreign firms to local managers and affect their stay-or-leave decisions. Drawing on social identity theory, we argue that nationalist movements against foreign subsidiaries’ parent country not only heighten the salience of local managers’ national identity by enhancing its subjective importance and situational relevance but also trigger the conflict between their national identity and the foreign organizational identity, thereby prompting them to exit foreign firms as a response to this identity conflict. The effect of nationalist movements on manager turnover likelihood is amplified when situational relevance rises with more peer subsidiaries experiencing the movement, but it is attenuated when the subjective importance of the foreign organizational identity increases with longer manager tenure in foreign subsidiaries and when the strength of identity conflict decreases with higher local ownership in foreign subsidiaries. To corroborate these ideas, we exploit the Chinese anti-Japan protests in 2012 to obtain plausibly exogenous variation and employ a difference-in-differences design in the survival analysis framework to examine the turnover likelihood of 1106 Chinese managers in 915 Japanese subsidiaries in the period 2008-2014.
Speaker
Prof. Wenjie LIU is an Assistant Professor of Management at City University of Hong Kong. His research interests span the areas of nonmarket strategy, global strategy, sustainability, and political economy, especially regarding the governance of sustainable business in emerging markets. His research has been accepted for publication in Journal of International Business Studies and Journal of Management. Wenjie received his Ph.D. from Rotterdam School of Management, Erasmus University. He has held a visiting appointment at Columbia Business School.
All are welcome!
