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Whereto the multinational? The evolution of technological capabilities in the multinational network

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  • Zander, Ivo

Abstract

This paper empirically investigates how internationalization influences the generation of new technology within the multinational corporation. Data on the introduction of 756 technologies by 23 Swedish multinationals over the 1971-1990 period show that foreign units account for an increasing share of all new technologies that are introduced in the multinational network. Additionally, foreign units are associated with a significantly higher probability of entry into new and more distantly related fields of technology, creating a long-term drift into new technological capabilities. The data support the proposition that foreign acquisitions are particularly likely to introduce new and more distantly related technology to the multinational group, although this aspect of technological renewal predominantly applies to firms carrying out explicit international acquisition strategies. The findings are consistent with an evolutionary view of the multinational corporation, involving a gradual movement into new fields of technology through maturing international operations and more significant departures from established technology portfolios through events like foreign acquisitions. It is argued that international growth allows the multinational to leverage its accumulated experience in the exploitation of geographically dispersed and idiosyncratic technological capabilities. At the same time, the observations point to a fundamental, growing and perhaps underestimated tension between technological opportunity and coordination and control in the maturing multinational corporation.

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  • Zander, Ivo, 1999. "Whereto the multinational? The evolution of technological capabilities in the multinational network," International Business Review, Elsevier, vol. 8(3), pages 261-291, August.
  • Handle: RePEc:eee:iburev:v:8:y:1999:i:3:p:261-291
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    Cited by:

    1. Kappen, Philip, 2011. "Competence-creating overlaps and subsidiary technological evolution in the multinational corporation," Research Policy, Elsevier, vol. 40(5), pages 673-686, June.
    2. Jesús F. Lampón & Pablo Cabanelas & Javier González Benito, 2015. "The impact of implementation of a modular platform strategy in automobile manufacturing networks," Working Papers. Collection B: Regional and sectoral economics 1502, Universidade de Vigo, GEN - Governance and Economics research Network.
    3. Un, C. Annique & Cuervo-Cazurra, Alvaro, 2008. "Do subsidiaries of foreign MNEs invest more in R&D than domestic firms?," Research Policy, Elsevier, vol. 37(10), pages 1812-1828, December.
    4. Dellestrand, Henrik & Kappen, Philip, 2011. "Headquarters Allocation of Resources to Innovation Transfer Projects within the Multinational Enterprise," Journal of International Management, Elsevier, vol. 17(4), pages 263-277.
    5. Ambos, Bjorn, 2005. "Foreign direct investment in industrial research and development: A study of German MNCs," Research Policy, Elsevier, vol. 34(4), pages 395-410, May.
    6. Vithessonthi, Chaiporn & Tongurai, Jittima, 2015. "The effect of leverage on performance: Domestically-oriented versus internationally-oriented firms," Research in International Business and Finance, Elsevier, vol. 34(C), pages 265-280.
    7. Schmid, Stefan & Schurig, Andreas, 2003. "The development of critical capabilities in foreign subsidiaries: disentangling the role of the subsidiary's business network," International Business Review, Elsevier, vol. 12(6), pages 755-782, December.
    8. Simona Iammarino & Philip McCann, 2010. "The Relationship between Multinational Firms and Innovative Clusters," Chapters,in: The Handbook of Evolutionary Economic Geography, chapter 8 Edward Elgar Publishing.
    9. Lehrer, Mark & Asakawa, Kazuhiro, 2002. "Offshore knowledge incubation: the "third path" for embedding R&D labs in foreign systems of innovation," Journal of World Business, Elsevier, vol. 37(4), pages 297-306, January.
    10. De Beule, Filip & Van Den Bulcke, Daniel, 2009. "Retrospective and prospective views about the future of the multinational enterprise," International Business Review, Elsevier, vol. 18(3), pages 215-223, June.

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