Geographically Dispersed Technological Capability Building and MNC Innovative Performance: The Role of Intra-firm Flows of Newly Absorbed Knowledge

Feng Zhang, Guohua Jiang, John Cantwell

Research output: Contribution to journalArticle

5 Scopus citations

Abstract

This study identifies key mechanisms linking multinationality with the knowledge advantages of multinational corporations (MNCs). These mechanisms are the absorption of new knowledge by one individual MNC unit and the subsequent flows of such newly absorbed knowledge to other geographically distant units of the same firm. The intra-MNC and inter-unit flows of such newly absorbed knowledge include exchanges between a parent and its overseas subsidiaries and those between subsidiaries. Through analyzing the U.S. patent data of the world's largest firms in the electrical equipment industry, our study shows that those two mechanisms are complementary in affecting MNC innovative performance. More notably, given the geographically dispersed new knowledge absorption within an MNC, only the flows of the newly absorbed knowledge between the parent and subsidiaries, in contrast to those between subsidiaries, are positively associated with MNC innovative performance. This study contributes to the MNC literature. Managerial implications are also discussed.

Original languageEnglish (US)
Article number100669
JournalJournal of International Management
Volume25
Issue number3
DOIs
StatePublished - Sep 1 2019

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Finance
  • Strategy and Management

Keywords

  • Geographical dispersion
  • Knowledge access and absorption
  • Knowledge advantages
  • MNCs
  • Multinationality
  • Parent and subsidiaries

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