Local, global, and internal knowledge sourcing: The trilemma of foreign-based R&D subsidiaries

Abstract

Multinational Enterprises (MNEs) develop and sell their products and services in a global market, but also have the ability to source knowledge from local, global and intra-MNE networks. We argue that sourcing knowledge from each of the three networks is contingent upon factors, such as the strategic choice made by the headquarters about the role of the research and development (R&D) subsidiary, the scientific richness of the host location, and the institutional (i.e. IPR -Intellectual Property Rights) distance between the home and host locations. We test our hypotheses on a dataset of 89 foreign-based R&D subsidiaries of Fortune 500 MNEs.Our results indicate that R&D subsidiaries with support lab mandates are less likely to use host and internal (intra-MNE) sources of knowledge and more likely to use the home location's sources of knowledge. Internationally independent labs are less likely to source knowledge from internal networks. Our findings show also that the scientific capability and availability of a technically skilled workforce in the host location is associated with the R&D subsidiary's use of local, rather than internal 2 knowledge sources. Finally, we find that weak IPR spurs the use of local knowledge sources, suggesting a role for technological spillovers.

Complementarity and Substitution in the Knowledge Networks of R&D Subsidiaries

“…We have studied the relationships in the context of foreign-based R&D subsidiaries. Firms locate R&D units in different countries to tap into local knowledge and utilize cost advantages in qualified labor (Athreye et al, 2016). Accordingly we have argued that the possible coordination costs and inefficiencies of sourcing knowledge will surface if we acknowledge all the sources from which an R&D subsidiary can obtain new knowledge.…”

“…The only available data that actually ask questions about all three sources of knowledge is the University of Reading survey of the Internationalization of R&D conducted in 1989 (described in Athreye, Batsakis, & Singh, 2016;Pearce & Singh, 1992). The sampling frame of the survey consisted of the Fortune 500 list published in 1986 when only 405 of the 500 units had established R&D facilities abroad.…”

Social Media Networks Use in Communication Analyses of Arabic Countries

“…It helps people to develop and research topics that are interested in. knowledge is well considered as a modern technological tool for receiving and instant update and modernization [35].…”

Estratégias de offshoring em empresas multinacionais

“…A principal contribuição acadêmica da tese é a aproximação da discussão do offshoring de atividades de inovação (Lewin et al, 2009;Santangelo et al, 2016) e dual embeddedness (Meyer et al, 2011) mostrando que, o offshoring outsourcing se configura como uma resposta para as pressões divergentes do dual embeddedness e o captive offshoring outsourcing decorre do captive offshoring que é efeito de situações de dual embeddedness das subsidiárias. De maneira mais ampla, os resultados contribuem para as pesquisas que procuram entender melhor a questão do embeddedness nas multinacionais (Athreye, Batsakis, & Singh, 2016;Ferraris, 2014), assim como, mostra como as estratégias de offshoring nos ajudam entender melhor as configurações de empresas multinacionais (Doh, 2005;Doz & Wilson, 2012) perante um cenário de maior conectividade do conhecimento global (Cano-Kollmann, Cantwell, Hannigan, Mudambi, & Song, 2016).…”

“…Isso faz com que a multinacional busque parceiros externos para balancear suas fontes de inovação (Athreye et al, 2016;Grimpe & Kaiser, 2010). À procura de clusters de inovação (Doz et al, 2001;Doz & Wilson, 2012) e da rede tecnológica de cada localidade (Nell et al, 2011), a multinacional expande suas conexões não mais por somente operações próprias, mas por meio de parcerias configuradas em estratégias de captive offshoring outsourcing e offshoring outsourcing (Benito, Dovgan, Petersen, & Welch, 2013;Contractor et al, 2010).…”