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Subsidiary marketing knowledge and strategic development of the multinational corporation

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  • Holm, Ulf
  • Sharma, D. Deo

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.

Suggested Citation

  • Holm, Ulf & Sharma, D. Deo, 2006. "Subsidiary marketing knowledge and strategic development of the multinational corporation," Journal of International Management, Elsevier, vol. 12(1), pages 47-66, March.
  • Handle: RePEc:eee:intman:v:12:y:2006:i:1:p:47-66
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Scott-Kennel, Joanna & Giroud, Axele, 2015. "MNEs and FSAs: Network knowledge, strategic orientation and performance," Journal of World Business, Elsevier, vol. 50(1), pages 94-107.
    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. 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.
    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. Lee, In Hyeock & Paik, Yongsun & Uygur, Ugur, 2016. "Does Gender Matter in the Export Performance of International New Ventures? Mediation Effects of Firm-specific and Country-specific Advantages," Journal of International Management, Elsevier, vol. 22(4), pages 365-379.
    6. Rost, Katja & Graetzer, Gitte, 2014. "Multinational Organizations as Rule-following Bureaucracies — The Example of Catholic Orders," Journal of International Management, Elsevier, vol. 20(3), pages 290-311.
    7. 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.
    8. 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.
    9. 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.
    10. 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.

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