Leveraging knowledge and competencies across space: The next frontier in international business (original) (raw)
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Knowledge connectivity: An agenda for innovation research in international business
The innovation-driven multinational enterprise (MNE) has dominated international business (IB) research for several decades now. Beginning with the award-winning research of Dunning, there have been calls for IB researchers to rediscover the importance of locations. Recent work has emphasized that firms and locations co-evolve with one another, as knowledge is transferred and leveraged across space. Integrating insights from IB and economic geography, we propose a research agenda for IB scholarship on spatially dispersed yet connected innovation processes. This agenda is premised on the current reality of global value chains in which mobile (MNEs, people) and immobile (locations) factors interact. The research perspective suggested recognizes that locations are host to increasingly " fine-sliced " activities, whose nature and composition are continuously changed by MNE-driven innovation processes. As today's specialized activities become tomorrow's standardized ones, the shifting distribution of global value creation depends on the pattern of international knowledge connectivity.
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The main analytical and multidisciplinary frameworks adopted for understanding the multinational enterprise (MNE) have tended to be largely non-spatial and non-geographical in nature. Although there have been some recent developments incorporating geography into the analysis of the of MNE studies the longstanding and widespread absence of geography in MNE studies leads to analytical problems. In particular, in the investigation of MNE operations and their interactions with different economic actors and contexts, the use of typical dichotomies, such as home versus host, horizontal versus vertical integration, and determinant versus impact, today prove to be much less effective or relevant than might previously have been the case. More specifically, the fundamental geographical and institutional re-orderings associated with modern globalization mean that nowadays we see increasingly co-dependent and co-evolutionary corporate and geographical networks. Understanding these is essential ...
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The increasing interconnection of local, trans-local and transnational knowledge networks is the outcome of the coevolution of (i) knowledge centers, typically city regions, (ii) epistemic communities that are grounded in and connect these regions and (iii) firms, usually multinational enterprises (MNEs). This interaction has created opportunities for innovation, but it is also impeded by a range of frictions that arise in the process of integrating locally embedded knowledge from geographically dispersed and culturally disparate regions across different countries. This article develops a simple model of how such frictions that MNEs encounter in their knowledge internationalization process can be overcome through ongoing processes of connecting, sense-making and integrating.
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The increasing geographical dispersion of corporate R&D has been identified as a major feature of the current ICT-based paradigm. Following the finding that innovation which depends most upon tacit knowledge (in the science-based fields, and in the enhancement of a firm's core competence) tends to remain more agglomerated in the parent company, this paper analyses certain firm-specific cases in which the creation of even science-based and industry-specific core technologies is dispersed internationally. It seems that the main factors driving the occasional geographical dispersion of the creation of these kinds of otherwise highly localised technologies are either locally embedded specialisation which cannot be accessed elsewhere, or company-specific global strategies that utilise the development of an organisationally complex international network for technological learning.
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We respond to calls in the strategy and international business literature for elucidating how multinational subsidiaries develop contextual intelligence in host countries and how they use the local context as a source of valuable opportunities for learning. Applying the theoretical lens of subsidiary absorptive capacity and building on a gravity model, we propose an approach that can distinguish and compare the influences of the host country context and headquarters over the subsidiary knowledge production. Some subsidiaries may become global second headquarters and innovation hubs, as evidenced qualitatively in the paper with the case of Cisco. Essentially, subsidiaries, characterized by higher stocks of knowledge and greater number of locally hired employees are likely to absorb relatively more knowledge from the local host country context.
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This study explores the co-evolution of the subsidiaries of the multinational firm with their global organizations and geographic locations. We examine when and how subsidiaries respond to technological changes in these environments to expand their scope and develop new technologies. Using the concepts of local search and communities of practice, we propose that increased technology creation by the subsidiary's parent firm and host country, in areas specific to the subsidiary's expertise and at the broad industry level, has differential effects on the types of new technologies-competence exploiting and competence creating-developed by the subsidiary. We further propose that subsidiary embeddedness in the organization and location moderates the relationship between technological increases and the nature of subsidiary new technology development.