Balancing the trade-off between learning prospects and spillover risks: MNC subsidiaries’ vertical linkage patterns in developed countries

Knowledge Spillovers from FDI: A Critical Review from the International Business Perspective

“…However, recent literature has suggested that the competitive threats of FDI‐KSs are more hazardous when domestic actors are already equipped with higher absorptive capacity that enables them quickly to learn, use and even disseminate the knowledge leaking from MNC boundaries (Perri et al . ).…”

“…Therefore, especially when investing in developed countries where domestic agents are likely to be provided with high absorptive capacity, foreign firms are not indifferent to the risk of spilling their knowledge to local counterparts (Perri et al . ).…”

New insights on the role of location advantages in international innovation

“…The number of specialized universities and institutes in a given scientific field are finite, so even where a technological leader would prefer to avoid spatial proximity with its less-able rivals, it cannot prevent these firms from collocating in order to establish embedded relationships with these institutions. Thus, once competitors collocate, the decision to embed locally in order to access local complementary knowledge depends on entry motivations and firms capabilities since such a decision may bring about risks of unintended knowledge spillovers (Perri et al 2011;Santangelo 2011). In particular, when domestic actors are valuable in terms of knowledge, rivals entering the market with a competence-creating motivation (as opposed to a non-competencecreating motivation) embed in the host economy as their expected payoffs of embeddedness exceed those of isolation (Santangelo 2011).…”

“…In particular, when domestic actors are valuable in terms of knowledge, rivals entering the market with a competence-creating motivation (as opposed to a non-competencecreating motivation) embed in the host economy as their expected payoffs of embeddedness exceed those of isolation (Santangelo 2011). Moreover, empirical evidence documents that highly capable firms invest more on the relationships with local partners under conditions of low competition, but they also reduce their commitment more to such relationships when the perceived pressure from the competitive environment exceeds a certain threshold as a result of potential loss from outward spillovers (Perri et al 2011). between firms operating in the same industry and core technological fields.…”

Location, collocation and innovation by multinational enterprises: a research agenda

“…Economic geographers have emphasised that proximity does not guarantee immediate knowledge spillovers because benefitting from proximate innovation network relationships requires intentional investments in these relationships (Maskell 2002). At the same time, international business scholars have nuanced the argument that knowledge spillovers from proximate actors within the MNE's innovation network are unambiguously beneficial, drawing attention on inward vs. outward, and intended vs. intended knowledge spillovers (Alcácer 2006;Cantwell and Santangelo 2002;Perri et al 2013;Santangelo 2012).…”