How do MNEs invent? An invention-based perspective of MNE profitability

Abstract

Although MNEs create inventions both internally and collaboratively with partners as well as within and across countries, we know very little about the effects that combining such inventive activities have on their profitability. This study develops an invention-based perspective that considers how MNEs' profitability is influenced by the ways they organize the development of inventions across organizational boundaries (internally or collaboratively) and geographic boundaries (within or across countries). This perspective postulates that profitability is not merely driven by advantageous technological endowments but also by how such technological assets have been created. Accordingly, it explains why specific combinations of inventive activities across the two boundaries affect the likelihood of creating breakthrough inventions differently, provide different revenue and cost advantages, and have different effects on MNEs’ profitability. It further explains why cross-country inventions contribute more to profitability when they are internalized, while within-country inventions are more profitable when they are created collaboratively.

The role of institutional quality and industry dynamism in explaining firm performance in emerging economies

“…Hence, depending on their cost structure, firms might benefit differently from improvements in institutional quality. Finally, it would also be useful to understand how other industry attributes change the role of institutional quality as well as distinguish between different types of firms (e.g., services and manufacturing) and their strategies (e.g., exploratory or exploitative; Mavroudi et al, 2020), and consider other aspects of performance, including innovation (Kafouros et al, 2022).…”

“…Rapid technological change means that firms in technologically dynamic industries cannot do everything internally. Instead, they must heavily rely on external partnerships and collaborative agreements (Kafouros et al, 2022). By contrast, reliance on collaborators is considerably lower in less technologically dynamic industries as firms face less pressure to change their capabilities and product offerings quickly.…”

“…Hence, depending on their cost structure, firms might benefit differently from improvements in institutional quality. Finally, it would also be useful to understand how other industry attributes change the role of institutional quality as well as distinguish between different types of firms (e.g., services and manufacturing) and their strategies (e.g., exploratory or exploitative; Mavroudi et al, 2020), and consider other aspects of performance, including innovation (Kafouros et al, 2022). ORCID Mario Kafouros https://orcid.org/0000-0002-6438-3990 Murod Aliyev https://orcid.org/0000-0002-1457-094X Panagiotis Piperopoulos https://orcid.org/0000-0002-6135-780X ENDNOTES a We choose to distinguish between technological and market dynamism because these are two of the most fundamental forces that represent the influence of customers and technology on the market (Li & Calantone, 1998;Zhou, 2006).…”

Do Firms Earn Rents from the Intangible Assets of Their Owners? Institution‐Based Insights from the Energy Sector

“…First, the value of OIAs depends on how well these assets can be combined together (Gnyawali and Ryan Charleton, 2018;Makadok, 2001;Sirmon, Gove and Hitt, 2008). Having multiple owners enables the firm to draw from a wider variety of OIAs, experiment with new alternatives and increase the likelihood of finding novel, complementary and valuable combinations (Dellermann, Fliaster and Kolloch, 2017;Kafouros et al, 2022). Second, multiple owners make the structure of ownership networks more idiosyncratic.…”

Development of Ecosystem for Corporate Green Innovation: Resource Dependency Theory Perspective

“…Second, collaborative innovation with different types of enterprises is conducive to technological synergy and reduces the uncertainty in green R&D activities [74,75]. Third, collaborative innovation enables enterprises to absorb knowledge spillover from different enterprises, especially those with high technology, which can inject more intellectual capital into corporate green innovation [76,77]. Finally, as corporate green innovation has public interests, corporate cooperation can improve the exclusivity of corporate innovation results [78].…”