Similarity to successful peers and the implications for subsidiary performance

This study explores whether the performance of a lower-performing subsidiary improves when it is staffed in a similar manner to high-performing subsidiaries. Using a panel data set comprising 11 266 observations of foreign subsidiaries of Japanese firms, it is found that in subsidiaries with strategic importance, staff deployment similar to that of high-performing peers has a positive impact on the subsidiary's performance. This study also demonstrates that when institutional distance between the host and home countries is large, staff deployment similar to that of high-performing peers has a negative impact on performance.