Differences between service and manufacturing companies : the impact on emerging market subsidiary performance

Abstract

Emerging markets are contributing more to the global economy’s growth. This has attracted multinational manufacturing and service firms to these markets. This research investigated whether the subsidiaries of service multinationals outperform those of manufacturing service multinationals in emerging markets. The research identified 430 listed service multinational subsidiaries and 359 listed manufacturing subsidiaries currently operating in 27 emerging markets. The subsidiaries performance was analysed using the Shapiro Wilk’s test for normality and the Mann-Whitney test. In addition to this, the research ran 10 multiple regression models to test the impact of country competitiveness factors on subsidiary performance. The findings show that service multinationals’ subsidiaries outperform manufacturing multinationals subsidiaries. Additionally the findings show that manufacturing multinationals subsidiaries have developed capabilities better suited to minimising the impact of the emerging market environment on their performance.