Headquarters Allocation of Resources to Innovation Transfer Projects within the Multinational Enterprise

Henrik Dellestrand and Philip Kappen

Journal of International Management, 2011, vol. 17, issue 4, 263-277

Abstract: This paper examines headquarters allocation of resources to specific innovation transfer projects within the multinational enterprise between sending and receiving subsidiaries, focusing on the role of the subsidiary hosting the transfer. Resource allocation is of key strategic importance for the organization given that resources are limited in the multinational enterprise and that headquarters is the principal actor in distributing resources internally between competing innovation transfer projects. Findings from a dataset of 169 innovation transfer projects reveal that headquarters tend to favor established lines of innovation at the subsidiary level, as opposed to overall subsidiary operational relatedness for additional corporate resources. It is found that headquarters also tend to allocate resources to acquired subsidiaries' transfer projects to a higher degree than to those of greenfield ones. A curvilinear effect is found for subsidiary bargaining power which is initially positive and subsequently negative. The results highlight that certain subsidiary and innovation traits are determinants of headquarters resource allocation.

Keywords: Multinational enterprise; Headquarter–subsidiary relations; Resource allocation; Innovation transfer; Bargaining power (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intman:v:17:y:2011:i:4:p:263-277

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DOI: 10.1016/j.intman.2011.02.001

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