Search results

The rise of emerging economies in the innovation landscape has often been attributed to the positive spillovers of innovation capabilities from multinational corporations (MNCs). However, it is less certain that their innovative capabilities imported from the home country function effectively in the host country from the outset. This study examines the performance of the innovation capabilities of MNC subsidiaries in emerging economies over time by considering the gradual process of their learning about host countries.

We employed stochastic frontier analysis to measure innovation capabilities, our focal construct. For regression analysis, we applied the Mundlak estimator, a variant of the fixed-effects panel estimator, to a sample comprising subsidiaries of MNCs from technologically advanced nations operating in Korea between 2006 and 2016.

Our results indicate that the innovation capabilities of MNC subsidiaries initially underperform those of local firms but improve over time, eventually surpassing the capabilities of their local counterparts. Furthermore, our findings reveal that institutional distance amplifies the underperformance of the innovation capabilities of MNC subsidiaries.

This study contributes to the literature by extending both theoretical development and empirical measurement of innovation capabilities in cross-national settings. Additionally, it deepens our understanding of whether and how MNC subsidiaries adapt their innovation capabilities to the local market environment.

The paper aims to investigate key aspects of climate change adaptation strategies of Multinational Corporations (MNCs) across two different climate-vulnerable country contexts, developed, i.e. Australia and developing, i.e. Bangladesh, while identifying the key factors affecting the formulation and implementation of such strategies.

The research uses a qualitative research method using interviews and document analysis while considering distinctive factors manifest in Australia and Bangladesh and focussing on the agricultural seed business sector.

The research reveals that no specific pattern of adaptation strategies exists across MNCs. They either follow a proactive “deliberate” strategy or a reactive “emergent” strategy. MNCs also follow a distinct strategy, “subliminal”, i.e. unintended or inadvertent strategy, by following the “business as usual” approach.

In recent years, many MNCs have started embracing strategies to reduce their negative environmental footprint but barely adopted any formal strategies to adapt to climate change impacts on their business operations. This study provides insights into the existing climate change adaptation strategies of MNCs, which could be beneficial for companies in better planning and implementing their existing as well as future climate change adaptation strategies.

Based on a developed-developing country comparison and together with a novel focus on the agricultural seed business sector, the paper has used a variety of business strategies in providing insights and understanding of the status of MNC climate change adaptation strategies. The research has identified and coined the term, “subliminal” or unintended strategy as a new addition to the MNC adaptation strategy literature.

This study seeks to explicate how institutional disruptions impact multinational corporation (MNC) subsidiary control choices. It uses institutional theory to understand the influence of formal and informal institutions across countries on the type of control system employed in an MNC manufacturing subsidiary.

This study’s sample is based on a unique dataset from five trustworthy sources. We use multi-level models to account for the hierarchical nature of the sample of 1,630 multinational subsidiaries spread across 26 host countries by firms from 21 home countries.

The institutional distance between the host and the home country has a negative relationship with strategic control. In contrast, the home country’s power distance has a positive relationship with strategic control.

Study findings indicate the need to incorporate formal and informal institutional elements in the control system’s conceptual framing and design. This notion complements existing visualizations of optimizing MNC controls through extant articulations of minimizing governance costs through organizational design choices or strategic needs.

This study reviews the literature on institutional theory in international business and examines the institutional factors behind the success or failure of multinational corporations (MNCs) in emerging markets.

This systematic literature review analysed 116 peer-reviewed articles published in leading journals between 2005 and 2022. The R package Bibliometrix and VOSviewer visualization software were used for analysis. A hybrid methodology combining bibliometric and content analyses was utilized to obtain a descriptive evaluation of the publication impact along with a keyword co-occurrence map, context-specific institutional effects and subsidiary strategies.

The Journal of International Business Studies, along with influential authors such as Mike W. Peng, Klaus Meyer, and Mehmet Demirbag, have taken the lead in advancing institutional theories for MNC internationalization in emerging markets. The clusters from the co-word analysis revealed dominant MNC entry modes, institutional distances and MNC localization strategies. The content analysis highlights how the institutional environment is operationalized across the macro-, micro- and meso-institutional contexts and how the MNC subsidiary responds in emerging markets. Meso-level interactions emphasize the relational aspects of business strategies in emerging markets.

Contextualizing subsidiary strategies and institutional forms can help managers align their strategic responses to the dynamic relationship between subsidiaries and the institutional environment. The review findings will enable policymakers to simplify regulatory policies and encourage MNC subsidiary networks with local stakeholders in emerging markets.

Legitimacy strategies such as corporate community involvement in emerging markets are crucial for enhancing societal support and removing stakeholders' scepticism for MNC business operations in emerging markets. Moral legitimacy should be implemented by managers, such as lending support to disaster management efforts and humanitarian crises, as they expand to new business environments of emerging markets.

This study is the first to explore institutional diversity and subsidiary strategic responses in a three-layered institutional context. The findings highlight the relevance of contextualizing institutional perspectives for international business scholars and practitioners as they help build context-specific theoretical frameworks and business strategies. Future research recommendations are suggested in the macro-, micro- and meso-institutional contexts.

This research explores how subsidiary embeddedness in different networks, both internal and external to the firm, contributes to the innovation of the service multinational corporation (MNC). Specifically, the authors analyze the different effects of networks on MNC’s subsidiaries performing competence-creating or competence-exploiting innovation activities, in the context of the service industry. The present study analyzes the data of 178 foreign-owned subsidiaries in the service sector performing innovation in Spain. The results of data analysis at two points in time show that external and internal embeddedness have a positive impact on the subsidiary innovation. Moreover, external embeddedness has a major positive influence on the competence-creating rather than on the competence-exploiting activities, while the internal embeddedness is equally important for both types of innovation. Therefore, this study contributes to further our understanding of how subsidiaries’ linkages affect innovation of the service MNC.

This study aims to investigate the drivers of political embeddedness and the possible outcome in terms of autonomy and subsidiary unique competences.

This study draws on resource dependence theory and applies structural equation modeling on a sample of 193 subsidiaries.

Political embeddedness is confirmed as a source of potential autonomy and the development of competences and is usually boosted by previous existing networks at the internal and external levels.

The authors investigate and discuss how multinational corporations can leverage political resources in host-country political arenas, extending their understanding of the interplay between political activities and market strategies.

This study aims to examine how the legitimacy of internal auditing is reconstructed during enterprise resource planning (ERP)-driven technological change.

The study is based on the comparative analysis of internal auditing and its transformation due to ERP implementations at two case firms operating in the food sector in Egypt – one a major Egyptian multinational corporation (MNC) and the other a major domestic company (DC).

Internal auditors (IAs) at MNC saw ERP implementation as an opportunity to reconstruct the legitimacy of internal auditing work by engaging and partnering with actors involved with the ERP change. In doing so, the IAs acquired system certifications and provided line functions and external auditors with data-driven business insights. The “practical coping mechanism” adopted by the IAs led to the acceptance (and legitimacy) of their work. In contrast, IAs at DC adopted a purposeful strategy of disengaging, blaming and rejecting since they were skeptical of the top management team's (TMT's) sincerity. The “disinterestedness” led to the loss of legitimacy in the eyes of the stakeholders.

The article offers two contributions. First, it extends the literature by highlighting a spectrum of behavior displayed by IAs (coping with impending issues vs strategic purposefulness) during ERP-driven technological change. Second, the article contributes to the literature on legitimacy by highlighting four intertwined micro-processes – participating, socializing, learning and role-forging – that contribute to reconstructing the legitimacy of internal auditing.

The purpose of this paper is to contribute to the discussion on how multinational company (MNC) headquarters (HQs) can manage the existing coopetition paradox to ensure innovation within the MNC. In contrast to the rather scarce previous research, the authors argue that HQ needs to solve the coopetition paradox under the sway of a parenting paradox. Hence, HQ faces a dual paradox.

Drawing on the literature on HQ’s role during MNCs’ innovation processes, this conceptual paper revisits the previously suggested HQ measures to enable coopetition among subsidiaries. By applying a sheer ignorance perspective, the authors contribute with a more nuanced understanding of the HQ’s role in innovation activities.

The article identifies four challenges as the HQ faces a parenting paradox that hinders its ability to solve the coopetition paradox: context specificity of subsidiaries’ innovation work, normative expectations of subsidiary managers, potential opportunistic behavior of HQ manager and HQ underestimation of needed resources. The article suggests that HQ needs to become more informed and preferably even embedded in the local innovation networks of its most important subsidiaries and that coopetition should not be managed solely on an HQ level.

Advocating a sheer ignorance perspective, the article pioneers in discussing the role that HQ plays in managing coopetition among subsidiaries in innovation activities.

The study examines the role of social media technologies (SMTs) as a driver of organization cultural intelligence (OCI) and new product development (NPD) capabilities, and how the complementary effects of these capabilities contribute to multinational corporations (MNCs)’ performance. Further, the study investigates the capability–performance relationship under conditions of high and low market and technological turbulence.

A quantitative survey method was implemented, with the data provided by senior marketing managers employed in MNC regional offices. The proposed model was tested using structural equation modeling and multi-group moderation analysis, and fuzzy-set qualitative comparative analysis (fsQCA).

The results indicate that SMTs support the development of OCI and NPD capabilities, which in turn contribute to MNC regional performance. A high level of technological turbulence only weakens the relationship between OCI and performance.

The results suggest that OCI contributes to MNCs’ performance, by deploying social media information and complementing the organization’s NPD capability under a specific environmental context.

The paper offers practical recommendations to MNCs on social media use when developing and launching new products in different regional markets. MNCs need to recruit culturally intelligent managers, who consider the level of market and technological turbulence when combining several types of capabilities.

Within the dynamic marketing capabilities literature, this is the first study to incorporate and reliably measure cultural intelligence capability. The research offers empirical evidence that OCI and NPD capabilities are necessary to achieve superior MNC performance and depend on the level of market and technological turbulence.

The primary objective of this study is to investigate the impact of a host country's corruption on the autonomy of a foreign subsidiary from a country with lower tolerance for corruption. In doing so, the study examines the moderating role of subsidiary-headquarters communication and multinational corporation's (MNC's) prior international experience in countries with a higher tolerance for corruption.

The data were collected from 182 foreign subsidiaries of 57 Malaysian MNCs operating in 16 host countries. The study employed ordinary least square (OLS) using Stata16.1 to analyze the modeled relationships.

The findings of this study reveal a significant positive association between the extent of corruption in the host country and the subsidiary's autonomy. The findings illustrate that an MNC's prior experience in the country with an increased tolerance for corruption does not moderate the association between corruption and subsidiary autonomy. However, the findings also confirm that the extent of headquarters-subsidiary communication negatively moderates the association between corruption and subsidiary autonomy.

The study uses unique data collected from Malaysian MNCs. Furthermore, the study contributes to the literature by bringing forth subsidiary autonomy as a counter strategy to potential risks that can arise due to weak institutions and widespread corruption in a host country.