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Subsidiary marketing knowledge and strategic development of the multinational corporation

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  • Holm, Ulf
  • Sharma, D. Deo
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    Abstract

    This paper explores distinctive marketing knowledge of subsidiaries as an important resource contributing to the performance of the multinational corporation (MNC). Two different paths are analyzed. The first is the direct effect of the usage of subsidiary marketing knowledge on the perceived performance of other MNC units. The second is the indirect effect in which an MNC's usage of subsidiary marketing knowledge affects its performance via capability development in technology and market expansion within the MNC. Using data on 237Â MNC subsidiaries in Sweden, six hypotheses are tested in a LISREL model. The results indicate that an MNC's usage of subsidiary marketing knowledge directly affects its performance. Additionally, the results reveal a strong relation between subsidiary marketing knowledge and the subsidiary's impact on development of the capabilities of other MNC units' technology and their expansion on the market, which in turn, positively impacts the performance of the MNC.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of International Management.

    Volume (Year): 12 (2006)
    Issue (Month): 1 (March)
    Pages: 47-66

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    Handle: RePEc:eee:intman:v:12:y:2006:i:1:p:47-66

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    Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/601266/description#description

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    Related research

    Keywords: Subsidiary Marketing knowledge Strategic development Performance Multinational corporation;

    References

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    1. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," NBER Working Papers 3993, National Bureau of Economic Research, Inc.
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    Cited by:
    1. Scott, Pamela & Gibbons, Patrick & Coughlan, Joseph, 2010. "Developing subsidiary contribution to the MNC--Subsidiary entrepreneurship and strategy creativity," Journal of International Management, Elsevier, vol. 16(4), pages 328-339, December.
    2. Hallin, Christina & Holm, Ulf & Sharma, Dharma Deo, 2011. "Embeddedness of innovation receivers in the multinational corporation: Effects on business performance," International Business Review, Elsevier, vol. 20(3), pages 362-373, June.
    3. Lee, In Hyeock & Rugman, Alan M., 2012. "Firm-specific advantages, inward FDI origins, and performance of multinational enterprises," Journal of International Management, Elsevier, vol. 18(2), pages 132-146.
    4. Michailova, Snejina & Mustaffa, Zaidah, 2012. "Subsidiary knowledge flows in multinational corporations: Research accomplishments, gaps, and opportunities," Journal of World Business, Elsevier, vol. 47(3), pages 383-396.
    5. Boehe, Dirk Michael, 2007. "Product development in MNC subsidiaries: Local linkages and global interdependencies," Journal of International Management, Elsevier, vol. 13(4), pages 488-512, December.
    6. Gnyawali, Devi R. & Singal, Manisha & Mu, Shaohua "Carolyn", 2009. "Knowledge ties among subsidiaries in MNCs: A multi-level conceptual model," Journal of International Management, Elsevier, vol. 15(4), pages 387-400, December.
    7. Edwards, Tony & Tempel, Anne, 2010. "Explaining variation in reverse diffusion of HR practices: Evidence from the German and British subsidiaries of American multinationals," Journal of World Business, Elsevier, vol. 45(1), pages 19-28, January.

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