PurposeThe purpose of this study is to understand the impact of network relationship strength and subsidiary initiatives on the headquarters value added and performance in foreign-owned subsidiaries. Design/methodology/approachOur study is based on survey data collected from foreign-owned...

Using a large data set of European firms, this paper provides evidence that operations at multinational headquarters are significantly more profitable than operations at their foreign subsidiaries. The effect turns out to be robust and quantitatively large. Our findings suggest that the...