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Do we really know the predictors of competence-creating R&D subsidiaries? Uncovering the mediation of dual network embeddedness

Fariza Achcaoucaou, Paloma Miravitlles and Fidel León-Darder

Technological Forecasting and Social Change, 2017, vol. 116, issue C, 181-195

Abstract: Many changes have been recorded in the R&D role played by the foreign subsidiaries of multinational corporations (MNCs), to the extent that today many are recognised as key players in the development of firm innovation-related competences. Given this trend, we examine the predictors of a subsidiary's R&D role as a competence-creating contributor to the MNC's long-term success. Traditionally, the predictors of subsidiaries' R&D roles have been sought in the specific features of the internal corporate and external host-country environments. However, we find that favourable corporate- and country-level conditions may not necessarily lead to the enhancement of a subsidiary's R&D role unless dual embeddedness – that is, the subsidiary's embeddedness in the knowledge networks of the MNC (internal embeddedness) and in those of the host country (external embeddedness) – is well established. The main contribution of this paper is the development of a multiple mediation model that disentangles the way in which corporate and host-country environments interrelate with a subsidiary's dual embeddedness in the expected configuration of its competence-creating R&D role. In developing the model, we use the PLS-SEM method to estimate the relationship between these elements and, eventually, to forecast the subsidiary's competence-creating R&D role. The proposed model should help managers shape the fate of the subsidiary's R&D strategic role.

Keywords: Technology strategy; R&D; Network embeddedness; Multinational; Subsidiary; Competence-creating role (search for similar items in EconPapers)
Date: 2017
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