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General Management Department's Lecture

TIME:: 08:00 16 Apr,2018
PLACE:Room 0201,Business Building

TOPIC: Social trust at subnational regions and foreign subsidiary performance: Evidence from foreign investments in China

Recent research suggests that subnational regions can explain the variation in foreign subsidiary performance. Yet, most studies either treat subnational region as a whole or focus on the effects of formal institutions at subnational level. This study examines how social trust, an important dimension of informal institutions at subnational level, affects foreign subsidiary performance. In a sample of 40,852 foreign investments in China in 2007, we find that the level of in-group trust in subnational regions has a negative effect on the performance of foreign subsidiaries, revealing the liability of outsidership faced by foreign subsidiaries. Our results also show that this negative effect can be reduced if the foreign investors are from regions of Chinese ethnic background or by increases in entry tenure. Our findings highlight the importance of incorporating informal institutions at subnational level in examining strategy and strategy outcomes.

Jane Lu is James Riady Chair in Asian Business and Economics in the Department of Management and Marketing, the University of Melbourne. She received her Ph.D. from the Richard Ivey School of Business, University of Western Ontario in 2001. Her research centers on international strategy such as FDI location choice, entry mode choice and alliance partner selection. Her recent research continues this line of research but with a focus on emerging market firms and their internationalization.
Jane Lu has published in leading academic journals such as Academy of Management Journal, Strategic Management Journal, Journal of International Business Studies, Journal of Management and Journal of Business Venturing, among other journals. Jane Lu is a Senior Editor of Asia Pacific Journal of Management and Journal of World Business. She also serves on the editorial boards of various leading international journals.
Prior to joining academia, Jane Lu worked in senior management positions in a major international trading company and in Rabobank in China.