Do I stay or do I go? Sub-national drivers for post-entry subsidiary development

The impact of location-specific factors on a multinational company's activities has long been investigated by international business scholars. However, studies have focused their attention on the pre-entry location decisions of foreign subsidiaries, rather than the post-entry decision of relocation or development in place. Building on the existing international business research that relates to initial strategies this work aims to fill in the current gap in the literature by offering a novel understanding of the importance of location-specific factors for the post-entry development of a multinational company's subsidiaries within the sub-national regional context. Using on-line survey data and a discrete-choice model of 91 foreign subsidiaries in Poland, the results show that knowledge-seeking factors are the main drivers for the post-entry subsidiary development in the Mazowieckie sub-national region, while efficiency-seeking factors drive location to in other sub-national regions of Poland. The findings also show that subsidiaries are indifferent to regional location the subsidiary's post-entry development if agglomerations and infrastructure factors are important to multinational companies.