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This research investigates performance determinants of service sector foreign-owned subsidiaries located in an emerging market. The focus is on the two dimensions of organizational networks (Who do you know?) and competencies (What do you know?).

Data were collected via a large-scale survey of managing directors located in the midrange emerging economy of Taiwan. The data are analyzed using partial least squares structured equation modeling (PLS-SEM) and fuzzy set qualitative comparative analysis (fsQCA) techniques.

The results show the importance of intraorganizational network strength as a key determinant of subsidiary performance, and that combinations of interorganizational network strength and competencies can determine performance in several subsidiaries.

This article offers new insights by testing a theoretical framework based on network perspective and the competence-based view of the firm in an emerging market context. It also offers an additional twist by employing symmetric (PLS-SEM) and nonsymmetric (fsQCA) methods to test the framework. This allows to arrive at robust conclusions about the complementarity and substitutability of the applied theories. This research also contributes to the current literature by providing fine-grained insights into the nature and impact of competencies and networks. It is also one of the few studies to focus specifically on service sector subsidiaries.

Research examining the joint role of serial acquisitions and subsidiary autonomy in holistic value provision within servitizing industrial firms is scarce. Thus, this paper aims to investigate the role of serial acquisition and subsidiary autonomy in providing value within servitizing industrial networks.

A conceptual framework is developed based on the case study of a large Swedish industrial group specializing in selling industrial products and providing industrial solutions to business customers through its numerous subsidiaries.

The analysis of 14 interviews with the five subsidiaries and seven customer firms and secondary data reveals interesting findings concerning the role of serial niche acquisition strategy and subsidiary autonomy in customer value provision in servitizing organizations. In particular, the authors find that the role of acquisitions in industrial firms extends beyond growth to customer sensing and proximity. Likewise, the authors find that subsidiary autonomy facilitates value provision to customers in industrial networks.

The paper provides a more nuanced understanding of how serial acquisitions and subsidiary autonomy are intertwined and jointly affect industrial firms’ value provision activities amidst the servitization transition in an intraorganizational network.

This study aims to examine whether and why subsidiary-unit managers’ prior international work experiences across multinational enterprises’ (MNEs) home and host countries impact their subsidiary-unit performance, considering the mediating effect of their advice networks.

A survey on 222 subsidiary-unit managers (154 parent country nationals [PCNs] and 68 host country nationals [HCNs]) of a Korean MNE operating in China, Vietnam, Thailand, Singapore, Hungary and Slovakia was conducted. The authors analyzed the data using partial least square structural equation modeling, multigroup analysis and bootstrapping techniques.

PCN subsidiary managers with more prior international work experience manage better-performing units due to the strength of the manager’s advice networks across local parties. However, for HCN subsidiary managers, this study did not find such mediating roles of the size and strength of their advice networks in the MNE home country.

This study provides novel insights and empirical evidence about the effect of the length of prior international work experience of subsidiary managers on their advice-seeking networks and subsidiary-unit performance. In addition, it draws on and add to social capital theory about how international work experience impacts dealing with local businesses and the relationship with corporate headquarters.

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.

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.

This study examines the relationship between subsidiary autonomy and the MNE subsidiary initiative collaboration (i.e. entrepreneurial initiative resource support, the subsidiary seeks and receives from the MNE). It proposes some underlying mechanisms as external embeddedness, and MNE organizational structures to explain the relationship between subsidiary autonomy and the MNE subsidiary initiative collaboration. The study draws on paradox theory arguing how at both the subsidiary and the parent MNE levels certain paradoxes are handled.

Survey data are collected in a time-lagged fashion from 429 foreign subsidiaries in New Zealand. Data are analyzed using structural equation modeling.

Results show that the relationship between subsidiary autonomy and the receipt of MNE resource support for initiatives is positive, and this is more likely the case where the subsidiary is managed under simple structures (i.e. subsidiary reports to corporate headquarters, regional headquarters or mandated units) rather than complex structures (i.e. a matrix or a network). Furthermore, an increase in subsidiary autonomy positively influences MNE initiative resource-seeking, and this is more likely the case where the subsidiary is less embedded externally.

The study is one of the first of studies that has applied paradox theory to MNE–subsidiary relationships regarding autonomy and MNE collaboration on initiatives. The study extends research on MNE–subsidiary collaboration on subsidiary initiatives as existing research is limited on this domain. The study contributes by showing how external embeddedness, and the complexity of organizational structures determine the relationship between subsidiary autonomy and MNE subsidiary initiative collaboration.

This paper explains the mechanisms underlying the generation of two-way knowledge spillovers through the interaction of subsidiaries with differentiated local responsibilities and domestic firms.

The study is based on firm-level panel data from a census of Colombian manufacturing firms for the period 2003–2012. The estimation procedure involves two stages. In the first one, total factor productivity (TFP) of foreign and domestic firms is estimated. In a second step, we estimate conventional spillovers (from foreign-owned to local firms) and reverse spillovers (from local to foreign-owned firms) separately, using a random effect approach.

This study’s findings reveal that only locally creative subsidiaries enjoy positive and significant two-way knowledge spillover effects. The connectivity of subsidiaries to local and international networks is reinforced by reciprocal relationships among actors that enhance bidirectional knowledge flows, these being favored by the dynamics of clustering effects.

The paper contributes with new empirical evidence about the mechanism explaining how the technological heterogeneity of subsidiaries plays a determinant role in the generation of both knowledge flows from foreign to domestic firms and to the reverse, all integrated into the same framework.

This study aims to understand the role of drivers, underlying challenges and, consequently, the implications of the reverse knowledge transfer (RKT) process for the multinational enterprises (MNE)s.

A dyadic qualitative research design was used with a cross-country design covering perspectives from both the headquarters and subsidiaries from the USA, Denmark, Pakistan, India and Bangladesh. In-depth interviews were conducted with managers in multiple sectors such as information technology, telecommunications, project management and engineering.

The study reveals the constraints and drivers of the RKT process, and furthermore elaborates on the implications for MNEs. RKT can lead to the development of new processes, subsidiary independence and intra-organizational knowledge transfer. Besides, it can entail challenges such as position insecurity for subsidiaries and a blurring of the MNE market vision. The findings demonstrate several implications for the MNEs.

The study highlights the direct implications of RKT for the multinational enterprises. The findings serve as a practical guide for global managers seeking to improve their competitive edge.

The study presents a framework of the RKT process from emerging market subsidiaries to parent companies, that demonstrates the role of drivers, underlying challenges and implications of the RKT process for the MNEs.

The authors’ contention in this paper is that the expression of subsidiary strategy in IB literature has become fragmented and incomplete. Therefore, this study aims to propose a rethink on how IB scholarship approaches the important issue of subsidiary strategy by holistically examining the discrete and integrated set of activities, choices and decisions that constitute the subsidiary strategy process for, in this context, assuming a competence-creating role within the multinational enterprise (MNE).

A conceptual model is designed to illustrate the holistic process of subsidiary strategy from assigned to assumed role and how a subsidiary can navigate a pathway to elevated performance and survival.

The paper identifies the key integrated elements that constitute a holistic strategic process that can enhance a subsidiary’s standing within the MNE and maximise its survival prospects.

Particular focus is placed on subsidiaries that strategise to advance their internal corporate role to competence creator via upgraded knowledge capabilities.

This paper offers a roadmap for IB scholars to contribute to a future discourse around the subsidiary strategy process for assuming a competence-creating role.