Subsidiary Perceived Autonomy in Transition Economies: The Case of Italian SMEs in Central and Eastern European Countries

This paper attempts to shed new light on the variables that lead the subsidiaries of internationalizing companies to perceive themselves as autonomous or otherwise. Specifically, we examine such perceptions in subsidiaries located in the transition economies of Central and Eastern European Countries (CEECs), where foreign direct investment (FDI), and hence internationalization, are growing dramatically. Although companies of all sizes are internationalizing, empirical literature has focused much more on the internationalization efforts of multinational companies (MNCs) than on those of small and medium enterprises (SMEs). This imbalance has generated another, namely, that research has focused on subsidiaries located in developed economies, and neglected those in transition economies. This paper aims to begin to redress these imbalances. Our research exclusively analyzed subsidiaries themselves and their local environments; we did not consider the features of parent companies. We identified a sample of 72 subsidiaries of micro, small and medium-sized Italian companies, and we tested these subsidiaries for the impact on their perception of autonomy of three variables: the subsidiary’s size; the subsidiary’s role (market seeking or cost reduction?); and the degree of economic development in the local country.