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Knowledge outflows from foreign subsidiaries: The tension between knowledge creation and knowledge protection

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  • Alessandra Perri

    ()
    (Department of Management, Università Ca' Foscari Venezia)

  • Ulf Andersson

    ()
    (Department of Strategic Management and Globalization, Copenaghen Business School)

Abstract

This paper analyzes the MNC subsidiaries' trade-off between the need for knowledge creation and the need for knowledge protection, and relates it to the extent of knowledge outflows generated within the host location. Combining research in International Business with Social Theory, we find that subsidiaries that extensively draw on external knowledge sources are also more likely to generate knowledge outflows to local firms. We argue that this may be explained by the subsidiariesÕ willingness to build the trust that facilitates the establishment of reciprocal knowledge linkages. However, when the value of the subsidiary's knowledge stock is very high, the need for knowledge protection restrains reciprocity mechanisms in knowledge exchanges, thus reducing the extent of knowledge outflows to the host location. This study contributes to the literature on the firm-level antecedents of FDI-mediated local knowledge outflows, as well as to the broad IB literature on the relationship between subsidiaries and their host regions. The implications for managers and policy-makers are also discussed.

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Bibliographic Info

Paper provided by Department of Management, Università Ca' Foscari Venezia in its series Working Papers with number 18.

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Length: 36 pages
Date of creation: Oct 2012
Date of revision:
Handle: RePEc:vnm:wpdman:31

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Web page: http://www.unive.it/dip.management
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Keywords: local knowledge outflows; FDI; knowledge creation; knowledge protection;

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Cited by:
  1. Badi H. Baltagi & Peter Egger & Michaela Kesina, 2014. "Sources of Productivity Spillovers: Panel Data Evidence from China," CESifo Working Paper Series, CESifo Group Munich 4812, CESifo Group Munich.

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