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Asset recombination in international partnerships as a source of improved innovation capabilities in China

Collinson S. () and Rajneesh Narula ()
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Collinson S.: Birmingham Business School, University of Birmingham

No 2014-061, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: This paper examines how multinational enterprises MNEs and local partners, including suppliers, customers and competitors in China, improve their innovation capabilities through collaboration. We analyse this collaboration as a three-way interaction between the ownership-specific O advantages or firm-specific assets FSAs of the MNE subsidiary, the FSAs of the local partner, and the location-specific assets of the host location. Our propositions are examined through a survey of 320 firms, supplemented with 30 in-depth case studies. We find that the recombination of asset-type Oa FSAs and transaction-type Ot FSAs from both partners leads to new innovation-related ownership advantages, or recombinant advantages. The study reveals important patterns of reciprocal transfer, sharing and integration for different asset categories tacit, codified and different forms of FSA and explicitly links these to different innovation performance outcomes. Ot FSAs, in the form of access to local suppliers, customers or government networks are particularly important for reducing the liability of foreignness for MNEs.

Keywords: INternational enterprises; MNEs; Assets; Firm specific assets; FSAs; Innovation; Knowledge transfer (search for similar items in EconPapers)
JEL-codes: F23 F68 O32 (search for similar items in EconPapers)
Date: 2014-07-31
New Economics Papers: this item is included in nep-cna, nep-cse, nep-ino and nep-tra
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