TY - JOUR
T1 - Subsidiary innovation performance: Balancing external knowledge sources and internal embeddedness
AU - Ferraris, Alberto
AU - Bogers, Marcel L.A.M.
AU - Brescianini, Sonia
PY - 2020/12
Y1 - 2020/12
N2 - The open innovation (OI) literature has focused primarily on OI strategies and external sourcing of knowledge at the organizational level and has paid less attention to the role of subsidiaries in the OI activities of multinational corporations (MNCs). In contrast, International Business (IB) scholars have shown that subsidiaries play an emergent role in MNC innovation activities and have highlighted the relevance of subsidiaries' external and internal linkages. In this paper, we bring together these perspectives by examining OI at the subsidiary level within MNCs and test our hypotheses through an empirical analysis using data from 91 MNC subsidiaries. Our findings show an inverted U-shaped relationship between the openness of subsidiaries to external knowledge sources and innovation performance. Moreover, we find that subsidiaries' internal embeddedness positively moderates the above relationship. Practically, our findings suggest the need for MNC and subsidiary managers to develop mechanisms to manage intra-organizational relations in order to achieve improved innovation performance while leveraging of external knowledge sources at the subsidiary level, thus favoring MNCs' knowledge management (KM) approach. We contribute to different interrelated streams of research by providing compelling evidence to support the assertion that subsidiaries need to balance external and internal openness.
AB - The open innovation (OI) literature has focused primarily on OI strategies and external sourcing of knowledge at the organizational level and has paid less attention to the role of subsidiaries in the OI activities of multinational corporations (MNCs). In contrast, International Business (IB) scholars have shown that subsidiaries play an emergent role in MNC innovation activities and have highlighted the relevance of subsidiaries' external and internal linkages. In this paper, we bring together these perspectives by examining OI at the subsidiary level within MNCs and test our hypotheses through an empirical analysis using data from 91 MNC subsidiaries. Our findings show an inverted U-shaped relationship between the openness of subsidiaries to external knowledge sources and innovation performance. Moreover, we find that subsidiaries' internal embeddedness positively moderates the above relationship. Practically, our findings suggest the need for MNC and subsidiary managers to develop mechanisms to manage intra-organizational relations in order to achieve improved innovation performance while leveraging of external knowledge sources at the subsidiary level, thus favoring MNCs' knowledge management (KM) approach. We contribute to different interrelated streams of research by providing compelling evidence to support the assertion that subsidiaries need to balance external and internal openness.
KW - Internal embeddedness
KW - Knowledge management
KW - Open innovation
KW - Subsidiary innovation
UR - http://www.scopus.com/inward/record.url?scp=85094628109&partnerID=8YFLogxK
U2 - 10.1016/j.intman.2020.100794
DO - 10.1016/j.intman.2020.100794
M3 - Article
SN - 1075-4253
VL - 26
JO - Journal of International Management
JF - Journal of International Management
IS - 4
M1 - 100794
ER -