Regional Embeddedness of Multinational Companies and their Limits: A Typology

Heidenreich, Martin; Mattes, Jannika

doi:10.4337/9780857934338.00012

Cited by 5 publications

(8 citation statements)

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“…They argue MNE innovativeness depends on their subsidiaries' ability to exploit external knowledge resources (Cantwell, ; Phene & Almeida, ). Despite this, parent companies can be skeptical of attempts to create subsidiary‐specific advantages (Chen et al, 2012; Heidenreich & Mattes, ; Laurens, Le Bas, Schoen, & Laredo, ; Chiesa, ). This is relevant because the HQs have the final say on initiatives subsidiaries can pursue and can limit their linkages to the region (Ciabuschi, Forsgren, & Martín, ; Chen etal., ; Dzedek, )…”

Section: Unpacking the Black Boxmentioning

confidence: 99%

“…Multinationals question regional embeddedness as a course of action to increase corporate competitiveness (Heidenreich & Mattes, ). This is especially true for MNEs that do not rely for their business on the region and can build linkages selectively.…”

Section: Unpacking the Black Boxmentioning

confidence: 99%

“…Secondly, CRCs are not always able to negotiate and coordinate with industry partners (Benneworth, Pinheiro, & Karlsen, ; Boardman & Ponomariov, ; Un & Rodríguez, ; Smith, Lai, Bea‐Taylor, Hill, & Kleinhenz, ; Gulbrandsen, ). However, we lack microlevel studies that confirm these factors affect CRC‐subsidiary interactions in practice (Heidenreich & Mattes, ). This gap is also part of a broader issue in regional innovation studies.…”

Section: Introductionmentioning

confidence: 98%

“…One way in which foreign subsidiaries can deepen their connections with the local context is by collaborating in their innovative efforts with universities (Williams & Ecker, ; Guimón & Salazar‐Elena, ; Heidenreich & Mattes, ; Jappe‐Heinze & Koschatzky, ). And policy can support the costly and lengthy process of building these translocal linkages.…”

Section: Introductionmentioning

confidence: 99%

“…But there are a number of potential challenges to building such strong CRC‐subsidiary relationships. For one, headquarters (HQs) can refuse to support a subsidiary's regional initiatives (Chen, Chen, & Ku, ; Heidenreich & Mattes, ). Secondly, CRCs are not always able to negotiate and coordinate with industry partners (Benneworth, Pinheiro, & Karlsen, ; Boardman & Ponomariov, ; Un & Rodríguez, ; Smith, Lai, Bea‐Taylor, Hill, & Kleinhenz, ; Gulbrandsen, ).…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

The role of university‐industry research centers in embedding foreign subsidiaries: Insights from automotive research and development in Ontario

Goracinova

2019

Geography Compass

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Regionally embedded foreign subsidiaries have an advantage over disembedded ones. The ability to draw on local knowledge networks to create differentiating capabilities can enhance the subsidiary's influence within the multinational enterprise. A subsidiary's power is shaped by its control over external resources or skills the parent company depends on to develop new products. These local relationships are then used to bargain for further mandates, sometimes in competition with sister subsidiaries. One way in which foreign subsidiaries can deepen their connections with the local context is by collaborating in their innovative efforts with university‐based collaborative research centers (CRCs). I argue that CRCs are not a panacea when it comes to embedding the subsidiaries of foreign multinational enterprises (MNEs). A review of the literature helps identify the subsidiary‐parent relationship and industry‐academia conflicts of interest as obstacles to the development of productive relationships between subsidiaries and academia. I draw on evidence from three Ontario CRCs, with different scientific focus and stakeholders and analyze how these factors shape their behavior. The study shows that long‐term CRCs‐subsidiary relationships can be challenging to establish. This is because subsidiaries remain tightly controlled by their parent companies and cannot get access to the resources necessary to pursue ambitious innovation projects. It is also challenging for subsidiaries to form long‐term relationships with CRC researchers, who prioritize other goals such as training skilled personnel and continuing their research agenda. CRCs where 1) subsidiaries have a strong bargaining position within the MNE, and 2) academic expertise is aligned with industry needs have a greater chance to contribute to future MNE embeddedness.

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