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Subsidiary roles as determinants of subsidiary technology sourcing: empirical evidence from China

Published on Aug 1, 2018in Economia Politica0.714
· DOI :10.1007/s40888-018-0120-8
Si Zhang1
Estimated H-index: 1
(CAS: Chinese Academy of Sciences),
Shasha Zhao3
Estimated H-index: 3
(Middlesex University)
+ 2 AuthorsMarina Papanastassiou17
Estimated H-index: 17
(Middlesex University)
Abstract
Emerging economies have become new destinations for knowledge sourcing, forcing Multinational Enterprises (MNEs) to reconfigure their global innovation strategies and structure. While foreign subsidiaries located in emerging economies were conventionally viewed as having market or efficiency seeking roles, they have started to evolve towards knowledge-seeking roles. We argue that the conventional wisdom shall be reassessed considering this recent shift. We empirically investigate 129 manufacturing MNE subsidiaries of Fortune 500 companies in China, in terms of their roles and sources of technology. Our results indicate that market and knowledge seeking subsidiaries located in China tend to have a positive impact on the generation of new knowledge, either through locally established MNE R&D laboratories or through collaborations with local firms and scientific institutions.
  • References (133)
  • Citations (1)
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References133
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The purpose of this paper is to explore the changing motives and location choice patterns of foreign direct investment (FDI) from South Korea to China. Prior to the global financial crisis of 2008, South Korean multinational enterprises (MNEs) invested in China for efficiency-seeking motives in order to take advantage of low costs. While evidence is emerging that MNEs from developed countries are now investing in China for market-seeking reasons, no such evidence exists for MNEs from Asia. This ...
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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...
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Plain language summary The rules for business vary not only between countries, but within countries. Subsidiaries of multinational enterprises (MNEs), thus, have to consider both the national level and the local context when designing their business practices. To examine this impact, we study R&D outsourcing in four Eastern member states of the European Union and find that local R&D outsourcing is used more frequently where local institutions are strong. However, this local impact depends on the...
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Much, if not most, of the international business literature argues that subsidiaries benefit from balancing their internal embeddedness in the multinational enterprise to which they belong, and their external embeddedness in the host environment in which they are located. In this paper we argue that there are tensions between embeddedness in internal and in external networks, and that a balance between these two types of embeddedness is more aspirational than achievable. We problematise the ofte...
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We performed econometric analysis to identify some of the main features of food and beverage foreign subsidiaries engaged in local R%D cooperation. In Spain, their main contributions to local networks of innovators seem to be financial and commercial rather than technological. Foreign subsidiaries that display high R%D intensity, and have a large number of R%D employees or a large share of new products in turnover, are not necessarily engaged in local R%D networks. Foreign subsidiaries facing fe...
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Source
#1Shasha Zhao (Middlesex University)H-Index: 3
#2Marina Papanastassiou (Middlesex University)H-Index: 17
Last. Chie Iguchi (Keio: Keio University)H-Index: 1
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In line with the recent shift of R&D internationalization towards developing Asia, this Perspective paper reviews, contextualises, and evaluates the evolving patterns of creation, transfer, and assimilation of knowledge in multinational enterprises (MNEs). A typology is proposed consisting of four stylized nodes: West (industrialized mature economies), East One (emerging industrializing economies of developing Asia), East Two (Asian economies at an earlier stage of industrialization), and East T...
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Source
Although there have been a considerable number of studies regarding subsidiary role typology in multinationals’ management literature, there appear to be few studies that consider knowledge-based role typology from the network-based perspective. The purpose of this study is to fill this gap and extend the study of Gupta and Govindarajan (1991). Thus, the study focuses on answering the following research question: Do subsidiaries have different roles in terms of knowledge flows within a multinati...
Source
#1Shasha Zhao (Middlesex University)H-Index: 3
#2Hui Tan (RHUL: Royal Holloway, University of London)H-Index: 8
Last. Anne-Wil Harzing (Middlesex University)H-Index: 46
view all 4 authors...
Intensified competition means that multinational enterprises (MNEs) are increasingly concerned with locating innovation activities in the most appropriate locations. This had led to emerging economies in the South becoming an important destination of R&D-related foreign direct investment (FDI), departing from their traditional role as low-cost production sites. Thus far, however, our understanding of this transformation process is limited. The purpose of this article is therefore to explore the ...
3 CitationsSource