Impact of international entry choices on the nature and type of innovation: Evidence from emerging economy firms from the Indian bio-pharmaceutical industry

Pooja Thakur-Wernz, John Cantwell, Shantala Samant

Research output: Contribution to journalArticle

2 Scopus citations

Abstract

As emerging economy multinational enterprises (EMNEs) enter foreign countries in search of new markets, seeking to expand their knowledge bases, research on the type and nature of innovation activity is needed to address the impact of EMNEs’ choices related to international expansion. Building on prior literature on entry mode and location choices, as well as on organizational learning, we argue that how and where an EMNE expands internationally will impact the nature of its innovation. We carry out empirical analysis on a sample of 167 Indian bio-pharmaceutical firms for the period from 1997–2017. Our findings suggest that greenfield ventures foster innovation in core technologies, while cross-border mergers and acquisitions (M&As) foster innovation in non-core technologies. In addition, locating subsidiaries in high income countries encourages product innovations, while locating in low income countries encourages process innovations. Our findings contribute to the growing literature on differences in learning outcomes of EMNE internationalization.

Original languageEnglish (US)
Article number101601
JournalInternational Business Review
Volume28
Issue number6
DOIs
StatePublished - Dec 2019

All Science Journal Classification (ASJC) codes

  • Marketing
  • Business and International Management
  • Finance

Keywords

  • Bio-pharmaceutical industry
  • Emerging economy MNE
  • India
  • Innovation
  • Internationalization
  • Organizational learning

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