Developmental and Quiescent Subsidiaries in the Asia Pacific: Evidence from Hong Kong, Singapore, Shanghai, and Sydney

Abstract

Examining “embedded” economic and social relations has become a popular theme among economic geographers who are interested in explaining the durability of place in supporting economic activities. This article explores the relationship between embeddedness and technology-oriented functions among three types of subsidiaries (regional headquarters, regional offices, and local offices) and for four cities: Hong Kong, Shanghai, Singapore, and Sydney. Using survey data from firms, we show that quiescent or branch plant-like subsidiaries, rather than developmental firms, dominate the region. But among developmental subsidiaries, returns on embeddedness are not always obvious. Embeddedness and developmental subsidiaries are most significantly correlated with manufacturing regional headquarters. However, a small group of subsidiaries (local and regional offices) also perform developmental functions, despite their relative newness and lack of embed-dedness in the region.

Keywords:

• Developmental and quiescent subsidiaries
• embeddedness
• transnational corporations
• regional headquarters
• Asia Pacific