R&D subsidiary embedment: a resource dependence perspective

Purpose – The purpose of this paper is to investigate researchers' operationalization of the construct of embedment of overseas R&D subsidiaries. Design/methodology/approach – First, the paper provides a systematic literature review of subsidiary embedment research. Second, it draws on resource dependence theory (RDT) and argues how embedment of overseas R&D subsidiaries should be treated as a more multi‐faceted and complex phenomenon than has been apparent in the literature to date. Findings – The authors find a large variation in the operationalization of embedment (e.g. frequency of communication versus depth of integration versus direction of communication). They also find scant attention to the nature of differences between external actors (types of actors, including local and international). These represent weaknesses that inhibit the advancement of theory and policy within the context of the globalization of innovation. Research limitations/implications – Researchers should treat R&D subsidiary embedment as a multi‐level phenomenon consisting of resource‐dependence interactions between collective entities internal and external to the subsidiary. R&D subsidiary embedment research design can be improved by being: formative; multiple‐actor; bi‐directional; and longitudinal. Practical implications – Managers should treat external R&D subsidiary embedment as pattern of resource dependencies in which the actors that matter most to R&D subsidiary performance are a function of the importance and availability of the innovation‐specific resources they contain. This involves building a capability in multi‐level networking with R&D resource providers in the external environment. Originality/value – The contribution of the current paper is to provide a critical evaluation of scholarly treatment of the construct of R&D subsidiary embedment, and to develop a foundation for operationalizing and analyzing the external embedment of R&D subsidiaries.