Innovation motives, knowledge sourcing and the roles of foreign subsidiaries : An exploratory study of advanced and emerging economy multinational enterprises

This study explores the impact of headquarters’ innovation motives on subsidiary knowledge sourcing, and their subsequent roles. The motivation of this research is to expand upon the understanding of the roles of foreign subsidiaries, and their implications on the innovation performance of the organisation. With a focus on organisational knowledge and innovation, the study aims to build upon the knowledge-based view of the firm by emphasising the importance of external knowledge sources on innovation performance. By utilising the multiple-case study approach, this research compares and analyses two multinational enterprises from emerging economies and two from advanced economies. The findings have demonstrated the following: 1) internal and external collaboration can facilitate the building of organisational innovative capabilities; 2) locational advantages can facilitate the building of subsidiary-specific advantages; 3) roles of foreign subsidiaries can be simultaneously dependent and independent from headquarters; and 4) dual knowledge flows and open knowledge sharing can enhance organisational innovative capabilities. The study contributes to the knowledge-based view (and specifically to research on knowledge sourcing and roles of MNE subsidiaries) by developing a novel framework and propositions conceptualising how external knowledge sources obtained through subsidiary knowledge sourcing can facilitate the building of subsidiary-specific advantages, and contribute to the MNE innovation performance