A Study on the Localization Strategies and Legitimacy Acquisition of Chinese Multinational Enterprises' Overseas Subsidiaries from the Perspective of Institutional Distance

Abstract

Against the backdrop of the deepening implementation of the "Going Global" strategy, Chinese multinational corporations are
facing a critical transition period from "market for technology" to "global resource allocation." However, the significant institutional distance between home countries and host countries creates an invisible "outsider disadvantage" barrier, posing numerous obstacles for overseas subsidiaries in obtaining organizational legitimacy. Research findings indicate that institutional distance not only determines the difficulty for enterprises to acquire external legitimacy but also forces them to obtain "legitimacy spillovers" through mergers and acquisitions
or maintain "internal legitimacy" through new models. This paper further constructs a "strategic triangle model, " proposing that Chinese
enterprises should flexibly adopt homogeneous or heterogeneous localization strategies based on the heterogeneity of institutional distance,
seeking a dynamic balance between global integration and local responsiveness. The research conclusions provide theoretical support and
practical guidance for Chinese enterprises to break through institutional barriers and achieve the leap from "economic embeddedness" to
"social embeddedness."