Skip to main content
SpringerLink
Log in

Subsidiary Combinative Capability for Knowledge Creation as a Co-evolutionary Development Process

  • Chapter
  • First Online:
Contemporary Issues in International Business

Part of the book series: The Academy of International Business ((AIB))

  • 1337 Accesses

Abstract

Understanding how the subsidiary develops a knowledge-creating role while operating in a dual context of an internal corporate environment, and external local network is the focus of this chapter. The authors discuss the need for the subsidiary to develop a combinative capability of managing relations in both contexts. To explore this combinative capability, the authors argue for a much-needed evolutionary perspective of the subsidiary in its host location and internal context. It adds to the theory of subsidiary role evolution . A conceptual framework for future research is developed in the chapter, which uses a co-evolutionary lens. It is advocated that process studies of longitudinal forms should be undertaken in future research, which take a rich in-depth empirical investigation of dynamic processes over time.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 99.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 129.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 179.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  • Achcaoucaou, F., Miravitlles, P., & Leon-Darder, F. (2014). Knowledge sharing and subsidiary R&D mandate development: A matter of dual embeddedness. International Business Review, 23, 76–90.

    Article  Google Scholar 

  • Achcaoucaou, F., Miravitlles, P., & Leon-Darder, F. (2017). Do we really know the predictors of competence-creating R&D subsidiaries? Uncovering the mediation of dual network embeddedness. Technological Forecasting and Social Change, 116, 181–195.

    Article  Google Scholar 

  • Alcacer, J., & Chung, W. (2007). Location strategies and knowledge spillovers. Management Science, 53, 760–776.

    Article  Google Scholar 

  • Ambos, T., Andersson, U., & Birkinshaw, J. (2010). What are the consequences of initiative taking in multinational subsidiaries? Journal of International Business Studies, 41, 1099–1118.

    Google Scholar 

  • Ambos, T., & Birkinshaw, J. (2010). Headquarters’ attention and its effect on subsidiary performance. Management International Review, 50, 449–469.

    Article  Google Scholar 

  • Andersson, U., Björkman, I., & Forsgren, M. (2005). Managing subsidiary knowledge creation: The effect of control mechanisms on subsidiary local embeddedness. International Business Review, 14, 521–538.

    Article  Google Scholar 

  • Andersson, U., Dellestrand, H., & Pedersen, T. (2014). The contribution of local environments to competence creation in multinational enterprises. Long Range Planning, 47, 87–99.

    Article  Google Scholar 

  • Andersson, U., Forsgren, M., & Holm, U. (2001). Subsidiary embeddedness and competence development in MNCs a multi-level analysis. Organization Studies, 22, 1013–1034.

    Article  Google Scholar 

  • Andersson, U., Forsgren, M., & Holm, U. (2002). The strategic impact of external networks—Subsidiary performance and competence development in the multinational corporation. Strategic Management Journal, 23, 979–996.

    Article  Google Scholar 

  • Andersson, U., Forsgren, M., & Holm, U. (2007). Balancing subsidiary influence in the federative MNC: A business network view. Journal of International Business Studies, 38, 802–818.

    Article  Google Scholar 

  • Asakawa, K. (2001). Organizational tension in international R&D management: The case of Japanese firms. Research Policy, 30, 735–757.

    Article  Google Scholar 

  • Bartlett, C. A., & Ghoshal, S. (1986). Tap your subsidiaries for global reach. Harvard Business Review, 64, 87–94.

    Google Scholar 

  • Bartlett, C. A., & Ghoshal, S. (1989). Managing across borders: The transnational solution (1st ed.). Boston, MA: Harvard Business School Press.

    Google Scholar 

  • Birkinshaw, J. (1997). Entrepreneurship in multinational corporations: The characteristics of subsidiary initiatives. Strategic Management Journal, 18, 207–229.

    Article  Google Scholar 

  • Birkinshaw, J. (1998). Foreign-owned subsidiaries and regional development: The case of Sweden. In J. Birkinshaw & N. Hood (Eds.), Multinational corporate evolution and subsidiary development (pp. 268–298). Houndmills: Macmillan.

    Google Scholar 

  • Birkinshaw, J., Hood, N., & Young, S. (2005). Subsidiary entrepreneurship, internal and external competitive forces, and subsidiary performance. International Business Review, 14, 227–248.

    Article  Google Scholar 

  • Birkinshaw, J., & Pedersen, T. (2008). Strategy and management in MNE subsidiaries. In A. M. Rugman (Ed.), The Oxford handbook of international business (pp. 367–388). New York: Oxford University Press.

    Google Scholar 

  • Birkinshaw, J., & Ridderstråle, J. (1999). Fighting the corporate immune system: A process study of subsidiary initiatives in multinational corporations. International Business Review, 8, 149–180.

    Article  Google Scholar 

  • Boschma, R. (2015). Towards an evolutionary perspective on regional resilience. Regional Studies, 49(5), 733–751.

    Google Scholar 

  • Boschma, R., & Fornahl, D. (2011). Cluster evolution and a roadmap for future research. Regional Studies, 45, 1295–1298.

    Article  Google Scholar 

  • Bouquet, C., & Birkinshaw, J. M. (2008). Weight versus voice: How foreign subsidiaries gain attention from corporate headquarters. Academy of Management Journal, 51, 577–601.

    Article  Google Scholar 

  • Bresciani, S., & Ferraris, A. (2016). Innovation-receiving subsidiaries and dual embeddedness: Impact on business performance. Baltic Journal of Management, 11, 108–130.

    Article  Google Scholar 

  • Cano-Kollmann, M., Cantwell, J., Hannigan, T., Mudambi, R., & Song, J. (2016). Knowledge connectivity: An agenda for innovation research in international business. Journal of International Business Studies, 47, 255–262.

    Article  Google Scholar 

  • Cantwell, J. (2014). The role of international business in the global spread of technological innovation. In Y. Temouri & C. Jones (Eds.), International business after the financial crisis. London: Palgrave Macmillan.

    Google Scholar 

  • Cantwell, J. (2017). Innovation and international business. Industry and Innovation, 24, 41–60.

    Article  Google Scholar 

  • Cantwell, J., Dunning, J., & Lundan, S. (2010). An evolutionary approach to understanding international business activity: The coevolution of MNEs and the institutional environment. Journal of International Business Studies, 41, 567–586.

    Article  Google Scholar 

  • Cantwell, J., & Mudambi, R. (2005). MNE competence-creating subsidiary mandates. Strategic Management Journal, 26, 1109–1128.

    Article  Google Scholar 

  • Cantwell, J. A., & Mudambi, R. (2011). Physical attraction and the geography of knowledge sourcing in multinational enterprises. Global Strategy Journal, 1, 206–232.

    Article  Google Scholar 

  • Cavanagh, A., Freeman, S., Kalfadellis, P., & Cavusgil, S. (2017). How do subsidiaries assume autonomy? A refined application of agency theory within the subsidiary-headquarters context. Global Strategy Journal, 7, 172–192.

    Article  Google Scholar 

  • Ciabuschi, F., Holm, U., & Martin Martin, O. (2014). Dual embeddedness, influence and performance of innovating subsidiaries in the multinational corporation. International Business Review, 23, 897–909.

    Article  Google Scholar 

  • Collinson, S., & Wang, R. (2012). The evolution of innovation capability in multinational enterprise subsidiaries: Dual network embeddedness and the divergence of subsidiary specialisation in Taiwan. Research Policy, 41, 1501–1518.

    Article  Google Scholar 

  • Conroy, K. M., & Collings, D. G. (2016). The legitimacy of subsidiary issue selling: Balancing positive & negative attention from corporate headquarters. Journal of World Business, 51, 612–627.

    Article  Google Scholar 

  • Delaney, E. (2000). Strategic development of the multinational subsidiary through subsidiary initiative-taking. Long Range Planning, 33, 220–244.

    Article  Google Scholar 

  • Dörrenbächer, C., & Gammelgaard, J. (2010). Multinational corporations, inter-organizational networks and subsidiary charter removals. Journal of World Business, 45, 206–216.

    Article  Google Scholar 

  • Doz, Y., Santos, J., & Williamson, P. (2001). From global to metanational: How companies win in the knowledge economy. Brighton: Harvard Business School Press.

    Google Scholar 

  • Feldman, M. (2001). Where science comes to life: University bioscience, commercial spin-offs, and regional economic development. Journal of Comparative Policy Analysis: Research and Practice, 2, 345–361.

    Google Scholar 

  • Figueiredo, P. (2008). Industrial policy changes and firm-level technological capability development: Evidence from Northern Brazil. World Development, 36, 55–88.

    Article  Google Scholar 

  • Figueiredo, P. (2011). The role of dual embeddedness in the innovative performance of MNE subsidiaries: Evidence from Brazil. Journal of Management Studies, 48, 417–440.

    Google Scholar 

  • Figueiredo, P. (2012). MNE-subsidiaries’ innovation capability building and learning in emerging economies: Firm-level evidence from the ICT industry in Brazil. International Journal of Innovation and Learning, 11(1), 12–43.

    Google Scholar 

  • Frost, T., Birkinshaw, J., & Ensign, P. (2002). Centers of excellence in multinational corporations. Strategic Management Journal, 23, 997–1018.

    Article  Google Scholar 

  • Gammelgaard, J., McDonald, F., Stephan, A., Tuselmann, H., & Dorrenbacher, C. (2012). The impact of increases in subsidiary autonomy and network relationships on performance. International Business Review, 21, 1158–1172.

    Article  Google Scholar 

  • Gammelgaard, J., & Pedersen, T. (2010). Internal versus external knowledge sourcing of subsidiaries and the impact of headquarters control. In U. Andersson & U. Holm (Eds.), Managing the contemporary multinational: The role of headquarters. Cheltenham, UK: Edward Elgar.

    Google Scholar 

  • Garcia-Pont, C., Canales, J., & Noboa. (2009). Subsidiary strategy: The embeddedness component. Journal of Management Studies, 46, 182–214.

    Google Scholar 

  • Giblin, M., & Ryan, P. (2012). Tight clusters or loose networks? The critical role of inward foreign direct investment in cluster creation. Regional Studies, 46, 245–258.

    Google Scholar 

  • Giroud, A., & Scott-Kennel, J. (2009). MNE linkages in international business: A framework for analysis. International Business Review, 18, 555–566.

    Article  Google Scholar 

  • Gupta, A., & Govindarajan, V. (1991). Knowledge flows and the structure of control within multinational corporations. Academy of Management Review, 16, 768–792.

    Google Scholar 

  • Holm, U., Holmström, C., & Sharma, D. (2005). Competitive development through business relationships or competitive environment? Subsidiary impact on MNC competitive advantage. Management International Review, 45, 197–218.

    Google Scholar 

  • Jenkins, M., & Tallman, S. (2010). The shifting geography of competitive advantage: Clusters, networks and firms. Journal of Economic Geography, 10, 599–618.

    Article  Google Scholar 

  • Kogut, B., & Zander, U. (1992). Knowledge of the firm, combinative capabilities and the replication of technology. Organization Science, 3, 383–397.

    Article  Google Scholar 

  • Kostova, T., Marano, V., & Tallman, S. (2016). Headquarters–subsidiary relationships in MNCs: Fifty years of evolving research. Journal of World Business, 51, 176–184.

    Article  Google Scholar 

  • Lane, P. J., & Lubatkin, M. (1998). Relative absorptive capacity and interorganizational learning. Strategic Management, 19, 461–477.

    Article  Google Scholar 

  • Lewin, A., & Volberda, H. (1999). Prolegomena on coevolution: A framework for research on strategy and new organizational forms. Organization Science, 10, 519–534.

    Article  Google Scholar 

  • Lewin, A., & Volberda, H. (2011). Co-evolution of global sourcing: The need to understand the underlying mechanisms of firm-decisions to offshore. International Business Review, 20, 241–251.

    Article  Google Scholar 

  • Madhok, A., & Liu, C. (2006). A coevolutionary theory of the multinational firm. Journal of International Management, 12, 1–21.

    Article  Google Scholar 

  • Malmberg, A., & Maskell, P. (2002). The elusive concept of localization economies: Towards a knowledge-based theory of spatial clustering. Environment and Planning, 34, 429–449.

    Article  Google Scholar 

  • Martin, R., & Sunley, P. (2011). Conceptualizing cluster evolution: Beyond the life cycle model? Regional Studies, 45, 1299–1318.

    Google Scholar 

  • McKelvey, B. (1997). Quasi-natural organization science. Organization Science, 8, 352–380.

    Article  Google Scholar 

  • Menzel, M., & Fornahl, D. (2009). Cluster life cycles—Dimensions and rationales of cluster evolution. Industrial and Corporate Change, 19, 205–238.

    Article  Google Scholar 

  • Meyer, K., Mudambi, R., & Narula, R. (2011). Multinational enterprises and local contexts: The opportunities and challenges of multiple-embeddedness. Journal of Management Studies, 48, 235–252.

    Google Scholar 

  • Michailova, S., & Mustaffa, Z. (2012). Subsidiary knowledge flows in multinational corporations: Research accomplishments, gaps and opportunities. Journal of World Business, 47, 383–396.

    Article  Google Scholar 

  • Mudambi, R., & Navarra, P. (2004). Is knowledge power? Knowledge flows, subsidiary power and rent-seeking within MNCs. Journal of International Business Studies, 35, 385–406.

    Article  Google Scholar 

  • Mudambi, R., & Swift, T. (2012). Multinational enterprises and the geographical clustering of innovation. Industry and Innovation, 19, 1–21.

    Article  Google Scholar 

  • Murmann, J. P. (2013). The coevolution of industries and important features of their environments. Organization Science, 24, 58–78.

    Article  Google Scholar 

  • Narula, R. (2002). Innovation systems and ‘inertia’ in R&D location: Norwegian firms and the role of systemic lock-in. Research Policy, 31, 795–816.

    Article  Google Scholar 

  • Perri, A., & Andersson, U. (2014). Knowledge outflows from foreign subsidiaries: The tension between knowledge creation and knowledge protection. International Business Review, 23, 63–75.

    Article  Google Scholar 

  • Perri, A., Andersson, U., Nell, P. C., & Santangelo, G. (2013). Balancing the trade-off between learning prospects and spillover risks: MNC subsidiaries vertical linkage patterns in developed countries. Journal of World Business, 48, 503–514.

    Article  Google Scholar 

  • Phelps, N. A., & Fuller, C. (2000). Multinationals, intracorporate competition, and regional development. Economic Geography, 76, 224–243.

    Article  Google Scholar 

  • Phene, A., & Almeida, P. (2008). Innovation in multinational subsidiaries: The role of knowledge assimilation and subsidiary capabilities. Journal of International Business Studies, 39, 901–919.

    Article  Google Scholar 

  • Rugman, A. (2014, July). Subsidiary specific advantages and multiple embeddedness in multinational enterprises. Academy of Multinational Enterprises, 7, 1–8.

    Google Scholar 

  • Rugman, A., Verbeke, A., & Yuan, W. (2011). Re-conceptualising Bartlett and Ghoshal’s classification of national subsidiary roles in the multinational enterprise. Journal of Management Studies, 48, 253–277.

    Google Scholar 

  • Santangelo, G. D. (2012). The tension of information sharing: Effects on subsidiary embeddedness. International Business Review, 21, 180–195.

    Article  Google Scholar 

  • Shaver, J., & Flyer, F. (2000). Agglomeration economies, firm heterogeneity, and foreign direct investment in the United States. Strategic Management Journal, 21, 1175–1193.

    Google Scholar 

  • Ter Wal, A., & Boschma, R. (2011). Co-evolution of firms, industries and networks in space. Regional Studies, 45, 919–933.

    Article  Google Scholar 

  • Van de Ven, A. H. (2007). Engaged scholarship: A guide for organizational and social research. Oxford: Oxford University Press.

    Google Scholar 

  • Welch, C., Pekkari, R., Plakoyiannaki, E., & Paavilainen-Mantymaki, E. (2011). Theorising from case studies: Towards a pluralist future for international business research. Journal of International Business Studies, 42, 740–762.

    Article  Google Scholar 

  • Yamin, M., & Andersson, U. (2011). Subsidiary importance in the MNC: What role does internal embeddedness play? International Business Review, 20, 151–162.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. J.E. Cairnes School of Business & Economics, NUI Galway, Galway, Ireland

    Johanna Clancy & Majella Giblin

  2. Trinity Business School, Trinity College Dublin, Dublin, Ireland

    Paul Ryan

  3. Mälardalen University, Västerås, Sweden

    Ulf Andersson

  4. BI Norwegian Business School, Oslo, Norway

    Ulf Andersson

Authors
  1. Johanna Clancy
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Paul Ryan
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Ulf Andersson
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Majella Giblin
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Johanna Clancy .

Editor information

Editors and Affiliations

  1. Henley Business School, University of Reading, Reading, United Kingdom

    Davide Castellani

  2. Henley Business School, University of Reading, Reading, United Kingdom

    Rajneesh Narula

  3. Henley Business School, University of Reading, Reading, United Kingdom

    Quyen T. K. Nguyen

  4. Henley Business School, University of Reading, Reading, United Kingdom

    Irina Surdu

  5. Henley Business School, University of Reading, Reading, United Kingdom

    James T. Walker

Rights and permissions

Reprints and permissions

Copyright information

© 2018 The Author(s)

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Clancy, J., Ryan, P., Andersson, U., Giblin, M. (2018). Subsidiary Combinative Capability for Knowledge Creation as a Co-evolutionary Development Process. In: Castellani, D., Narula, R., Nguyen, Q., Surdu, I., Walker, J. (eds) Contemporary Issues in International Business. The Academy of International Business. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-70220-9_11

Download citation

Publish with us

Policies and ethics

Search

Navigation