The impact of knowledge and financial resource flows for MNE strategy: A typology of subsidiary roles

Randi Lunnan, Klaus Meyer, Ram Mudambi and Qin Yang

International Business Review, 2023, vol. 32, issue 6

Abstract: What are the implications of finance and knowledge flows for MNE strategy? In this perspective paper, we discuss the antecedents and implications of HQ-subsidiary financial and knowledge flows. These flows differ, as the deployment of knowledge hinges on numerous contextual characteristics, whereas financial flows are relatively fungible. The complexity and diversity of knowledge resources make their transfer sensitive to several subsidiary-level characteristics such as R&D mandates, location, and inter-unit interdependencies. In contrast, financial resource flows are relatively easier to measure and directly compare across domains. Hence, they are likely to be allocated primarily on risk considerations, notably the equity control over the subsidiary. Both flows are needed for subsidiaries to succeed. Based on the interrelations of knowledge and financial resources flows into the subsidiaries, four types of subsidiary roles are categorized: strategic growth, interrelated, diversified, and independent. We discuss implications on subsidiary competitiveness and MNE risk and point to future research avenues addressing the dynamic and interrelated flows of both these resources.

Keywords: Resource flows within MNEs; Knowledge resources; Financial resources; Subsidiary roles (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0969593123000902
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:iburev:v:32:y:2023:i:6:s0969593123000902

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/133/bibliographic
http://www.elsevier. ... me/133/bibliographic

DOI: 10.1016/j.ibusrev.2023.102190

Access Statistics for this article

International Business Review is currently edited by P. Ghauri

More articles in International Business Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().