EVOLVING SUBSIDIARY ROLES AND REGIONAL ECONOMIC INTEGRATION IN EUROPE

The focus of this paper is on the impact of regional economic integration on changing roles and strategies of overseas subsidiaries. The literature has acknowledged the positive impact of regional economic integration on the investment attractiveness of member states participating in a regional bloc and hence new inflows of foreign direct investment. Yet, the interplay between regional economic integration and evolution of already established foreign subsidiaries remains under-researched, as these two phenomena are often studied in isolation from each other. The paper aims to examine this link in the context of new EU member states, using a proprietary data base. We find evolution of subsidiary roles, towards more advanced ones. Further, we analyse drivers of such evolution and their importance. The paper provides managerial and policy implications.