Competence-building in foreign subsidiaries: The case of new EU member states

This article examines patterns of competence-building in foreign subsidiaries located in new member states of the European Union. Among the theoretical foundations of this paper are the concepts of dynamic capabilities and subsidiary-specific advantages. We consider subsidiary competences as a combination of distinctive competences built into particular business functions. Furthermore, we examine sources of competences, and complementarities between these sources. We use a proprietary database to examine the research topic and find distinctive uneven growth of functional competences over time, distinctive patterns of complementarities between different functional competences and specific patterns of access to sources of competence. Finally, we discuss managerial and policy implications.