IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Knowledge outflows from foreign subsidiaries and the tension between knowledge creation and knowledge protection: Evidence from the semiconductor industry

  • Perri, Alessandra
  • Andersson, Ulf

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 build a conceptual framework suggesting 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 subsidiaries’ 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.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/pii/S0969593113001170
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal International Business Review.

Volume (Year): 23 (2014)
Issue (Month): 1 ()
Pages: 63-75

as
in new window

Handle: RePEc:eee:iburev:v:23:y:2014:i:1:p:63-75
Contact details of provider: Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/description#description

Order Information: Postal: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/bibliographic
Web: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/bibliographic

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Håkansson, Håkan & Snehota, Ivan, 1989. "No business is an island: The network concept of business strategy," Scandinavian Journal of Management, Elsevier, vol. 5(3), pages 187-200.
  2. Cantwell, John, 1995. "The Globalisation of Technology: What Remains of the Product Cycle Model?," Cambridge Journal of Economics, Oxford University Press, vol. 19(1), pages 155-74, February.
  3. Magnus Blomstrom & Jian-Ye Wang, 1992. "Foreign Investment and Technology Transfer: A Simple Model," NBER Working Papers 2958, National Bureau of Economic Research, Inc.
  4. Findlay, Ronald, 1978. "Relative Backwardness, Direct Foreign Investment, and the Transfer of Technology: A Simple Dynamic Model," The Quarterly Journal of Economics, MIT Press, vol. 92(1), pages 1-16, February.
  5. Beata Smarzynska Javorcik, 2004. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages," American Economic Review, American Economic Association, vol. 94(3), pages 605-627, June.
  6. Hall, B. & Jaffe, A. & Trajtenberg, M., 2001. "The NBER Patent Citations Data File: Lessons, Insights and Methodological Tools," Papers 2001-29, Tel Aviv.
  7. Jaffe, A.B. & Trajtenberg, M., 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," Papers 14-92, Tel Aviv.
  8. Juan Alcácer & Wilbur Chung, 2007. "Location Strategies and Knowledge Spillovers," Management Science, INFORMS, vol. 53(5), pages 760-776, May.
  9. Schrader, Stephan, 1991. "Informal technology transfer between firms: Cooperation through information trading," Research Policy, Elsevier, vol. 20(2), pages 153-170, April.
  10. Anupama Phene & Paul Almeida, 2008. "Innovation in multinational subsidiaries: The role of knowledge assimilation and subsidiary capabilities," Journal of International Business Studies, Palgrave Macmillan, vol. 39(5), pages 901-919, July.
  11. Rodriguez-Clare, Andres, 1996. "Multinationals, Linkages, and Economic Development," American Economic Review, American Economic Association, vol. 86(4), pages 852-73, September.
  12. Perri, Alessandra & Andersson, Ulf & Nell, Phillip C. & Santangelo, Grazia D., 2013. "Balancing the trade-off between learning prospects and spillover risks: MNC subsidiaries’ vertical linkage patterns in developed countries," Journal of World Business, Elsevier, vol. 48(4), pages 503-514.
  13. Bruce Kogut & Udo Zander, 1993. "Knowledge of the Firm and the Evolutionary Theory of the Multinational Corporation," Journal of International Business Studies, Palgrave Macmillan, vol. 24(4), pages 625-645, December.
  14. Sako, Mari, 1996. "Suppliers' Associations in the Japanese Automobile Industry: Collective Action for Technology Diffusion," Cambridge Journal of Economics, Oxford University Press, vol. 20(6), pages 651-71, November.
  15. Jonathan E. Haskel & Sonia C. Pereira & Matthew J. Slaughter, 2007. "Does Inward Foreign Direct Investment Boost the Productivity of Domestic Firms?," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 482-496, August.
  16. Bronwyn H. Hall & Adam Jaffe & Manuel Trajtenberg, 2005. "Market Value and Patent Citations," RAND Journal of Economics, The RAND Corporation, vol. 36(1), pages 16-38, Spring.
  17. Manuel Trajtenberg, 1990. "A Penny for Your Quotes: Patent Citations and the Value of Innovations," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 172-187, Spring.
  18. Cantwell, John & Janne, Odile, 1999. "Technological globalisation and innovative centres: the role of corporate technological leadership and locational hierarchy1," Research Policy, Elsevier, vol. 28(2-3), pages 119-144, March.
  19. Alex Eapen, 2012. "Social structure and technology spillovers from foreign to domestic firms," Journal of International Business Studies, Palgrave Macmillan, vol. 43(3), pages 244-263, April.
  20. Jasjit Singh, 2007. "Asymmetry of knowledge spillovers between MNCs and host country firms," Journal of International Business Studies, Palgrave Macmillan, vol. 38(5), pages 764-786, September.
  21. Branstetter, Lee, 2006. "Is foreign direct investment a channel of knowledge spillovers? Evidence from Japan's FDI in the United States," Journal of International Economics, Elsevier, vol. 68(2), pages 325-344, March.
  22. Crespo, Nuno & Fontoura, Maria Paula, 2007. "Determinant Factors of FDI Spillovers - What Do We Really Know?," World Development, Elsevier, vol. 35(3), pages 410-425, March.
  23. Görg, Holger & Greenaway, David, 2003. "Much Ado About Nothing? Do Domestic Firms Really Benefit from Foreign Direct Investment?," IZA Discussion Papers 944, Institute for the Study of Labor (IZA).
  24. de Faria, Pedro & Sofka, Wolfgang, 2010. "Knowledge protection strategies of multinational firms--A cross-country comparison," Research Policy, Elsevier, vol. 39(7), pages 956-968, September.
  25. Glass, Amy Jocelyn & Saggi, Kamal, 1998. "International technology transfer and the technology gap," Journal of Development Economics, Elsevier, vol. 55(2), pages 369-398, April.
  26. Adam B. Jaffe & Manuel Trajtenberg & Michael S. Fogarty, 2000. "The Meaning of Patent Citations: Report on the NBER/Case-Western Reserve Survey of Patentees," NBER Working Papers 7631, National Bureau of Economic Research, Inc.
  27. Ram Mudambi & Pietro Navarra, 2004. "Is knowledge power? Knowledge flows, subsidiary power and rent-seeking within MNCs," Journal of International Business Studies, Palgrave Macmillan, vol. 35(5), pages 385-406, September.
  28. Jaeyong Song & Paul Almeida & Geraldine Wu, 2003. "Learning--by--Hiring: When Is Mobility More Likely to Facilitate Interfirm Knowledge Transfer?," Management Science, INFORMS, vol. 49(4), pages 351-365, April.
  29. Rajneesh Narula & John Dunning, 2000. "Industrial Development, Globalization and Multinational Enterprises: New Realities for Developing Countries," Oxford Development Studies, Taylor & Francis Journals, vol. 28(2), pages 141-167.
  30. Anabel Marin & Martin Bell, 2006. "Technology spillovers from Foreign Direct Investment (FDI): the active role of MNC subsidiaries in Argentina in the 1990s," Journal of Development Studies, Taylor & Francis Journals, vol. 42(4), pages 678-697.
  31. Nigel Driffield & James H Love & Stefano Menghinello, 2010. "The multinational enterprise as a source of international knowledge flows: Direct evidence from Italy," Journal of International Business Studies, Palgrave Macmillan, vol. 41(2), pages 350-359, February.
  32. Paul Almeida & Bruce Kogut, 1999. "Localization of Knowledge and the Mobility of Engineers in Regional Networks," Management Science, INFORMS, vol. 45(7), pages 905-917, July.
  33. Williamson, Oliver E, 1993. "Calculativeness, Trust, and Economic Organization," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 453-86, April.
  34. Wilbur Chung, 2001. "Identifying Technology Transfer in Foreign Direct Investment: Influence of Industry Conditions and Investing Firm Motives," Journal of International Business Studies, Palgrave Macmillan, vol. 32(2), pages 211-229, June.
  35. Criscuolo,Paola & Narula,Rajneesh & Verspagen,Bart, 2002. "The relative importance of home and host innovation systems in the internationalisation of MNE R&D: a patent citation analysis," Research Memorandum 035, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  36. Snejina Michailova & Kate Hutchings, 2006. "National Cultural Influences on Knowledge Sharing: A Comparison of China and Russia," Journal of Management Studies, Wiley Blackwell, vol. 43(3), pages 383-405, 05.
  37. Hausman, Jerry & Hall, Bronwyn H & Griliches, Zvi, 1984. "Econometric Models for Count Data with an Application to the Patents-R&D Relationship," Econometrica, Econometric Society, vol. 52(4), pages 909-38, July.
  38. Minyuan Zhao, 2006. "Conducting R& D in Countries with Weak Intellectual Property Rights Protection," Management Science, INFORMS, vol. 52(8), pages 1185-1199, August.
  39. Ari Kokko & Mario Zejan & Ruben Tansini, 2001. "Trade regimes and spillover effects of FDI: Evidence from Uruguay," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 137(1), pages 124-149, March.
  40. John Dunning, 1981. "Explaining the international direct investment position of countries: Towards a dynamic or developmental approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 117(1), pages 30-64, March.
  41. Adam B. Jaffe, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits and Market Value," NBER Working Papers 1815, National Bureau of Economic Research, Inc.
  42. repec:dgr:tuecis:0220 is not listed on IDEAS
  43. Caves, Richard E, 1974. "Multinational Firms, Competition, and Productivity in Host-Country Markets," Economica, London School of Economics and Political Science, vol. 41(162), pages 176-93, May.
  44. Giroud, Axèle & Scott-Kennel, Joanna, 2009. "MNE linkages in international business: A framework for analysis," International Business Review, Elsevier, vol. 18(6), pages 555-566, December.
  45. Singh, Jasjit, 2008. "Distributed R&D, cross-regional knowledge integration and quality of innovative output," Research Policy, Elsevier, vol. 37(1), pages 77-96, February.
  46. Ulf Andersson & Mats Forsgren & Ulf Holm, 2007. "Balancing subsidiary influence in the federative MNC: a business network view," Journal of International Business Studies, Palgrave Macmillan, vol. 38(5), pages 802-818, September.
  47. Nigel Driffield & James H Love, 2007. "Linking FDI motivation and host economy productivity effects: conceptual and empirical analysis," Journal of International Business Studies, Palgrave Macmillan, vol. 38(3), pages 460-473, May.
  48. Susan E Feinberg & Sumit K Majumdar, 2001. "Technology Spillovers from Foreign Direct Investment in the Indian Pharmaceutical Industry," Journal of International Business Studies, Palgrave Macmillan, vol. 32(3), pages 421-437, September.
  49. von Hippel, Eric, 1987. "Cooperation between rivals: Informal know-how trading," Research Policy, Elsevier, vol. 16(6), pages 291-302, December.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:iburev:v:23:y:2014:i:1:p:63-75. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.