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The effects of global knowledge reservoirs on the productivity of multinational enterprises: The role of international depth and breadth

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  • Kafouros, Mario I.
  • Buckley, Peter J.
  • Clegg, Jeremy

Abstract

This study rests upon the premise that differences in the productivity performance of multinational enterprises (MNEs) stem from variations in their ability to access and combine globally distributed knowledge reservoirs within one organization. Its contribution lies in demonstrating that this important source of variation is determined by (a) the idiosyncratic manner in which the MNE's network of subsidiaries is structured, (b) the international breadth and depth of this network and (c) its location choices in the global landscape. We find that when multinationals spread their operations across many geographical markets, they benefit from knowledge externalities more than when they concentrate their activities in few countries. We further show that the ability to exploit spatially distant knowledge depends not only on idiosyncrasies specific to the MNE, but also on exogenous forces associated with international variations in appropriability regimes and industry-specific technological opportunities. As our study considers how the subsidiaries of the MNE collectively influence the productivity of the entire group, it captures complementarities and synergies within the group, and deepens understanding of how MNE-specific and location bound factors jointly shape performance outcomes.

Suggested Citation

  • Kafouros, Mario I. & Buckley, Peter J. & Clegg, Jeremy, 2012. "The effects of global knowledge reservoirs on the productivity of multinational enterprises: The role of international depth and breadth," Research Policy, Elsevier, vol. 41(5), pages 848-861.
  • Handle: RePEc:eee:respol:v:41:y:2012:i:5:p:848-861 DOI: 10.1016/j.respol.2012.02.007
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    2. Badi Baltagi & Peter Egger & Michaela Kesina, 2015. "Sources of productivity spillovers: panel data evidence from China," Journal of Productivity Analysis, Springer, vol. 43(3), pages 389-402, June.
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    4. Kafouros, Mario & Wang, Chengqi & Piperopoulos, Panagiotis & Zhang, Mingshen, 2015. "Academic collaborations and firm innovation performance in China: The role of region-specific institutions," Research Policy, Elsevier, vol. 44(3), pages 803-817.
    5. Driffield, Nigel & Mickiewicz, Tomasz & Temouri, Yama, 2016. "Ownership control of foreign affiliates: A property rights theory perspective," Journal of World Business, Elsevier, vol. 51(6), pages 965-976.
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    8. Badi H. Baltagi & Peter H. Egger & Michaela Kesina, 2016. "Firm‐Level Productivity Spillovers in China's Chemical Industry: A Spatial Hausman‐Taylor Approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 31(1), pages 214-248, January.
    9. Keeran Kowlaser & Helena Barnard, 2016. "Tie Breadth, Tie Strength And The Location Of Ties: The Value Of Ties Inside An Emerging Mnc To Team Innovation," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(01), pages 1-31, January.
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    13. Driffield, Nigel & Love, James H. & Yang, Yong, 2016. "Reverse international knowledge transfer in the MNE: (Where) does affiliate performance boost parent performance?," Research Policy, Elsevier, vol. 45(2), pages 491-506.
    14. Kafouros, Mario & Wang, Elizabeth Yi, 2015. "Technology transfer within China and the role of location choices," International Business Review, Elsevier, vol. 24(3), pages 353-366.
    15. Schiffbauer, Marc & Siedschlag, Iulia & Ruane, Frances, 2017. "Do foreign mergers and acquisitions boost firm productivity?," International Business Review, Elsevier, vol. 26(6), pages 1124-1140.
    16. Castellani, Davide & Montresor, Sandro & Schubert, Torben & Vezzani, Antonio, 2017. "Multinationality, R&D and productivity: Evidence from the top R&D investors worldwide," International Business Review, Elsevier, pages 405-416.
    17. repec:taf:jocebs:v:15:y:2017:i:1:p:41-58 is not listed on IDEAS
    18. Riviere, Monica & Suder, Gabriele, 2016. "Perspectives on strategic internationalization: Developing capabilities for renewal," International Business Review, Elsevier, vol. 25(4), pages 847-858.
    19. Guimón , José & Chaminade , Cristina & Maggi , Claudio, 2015. "Policies to attract R&D-related FDI in Chile: Aligning incentives with local linkages and absorptive capacities," Papers in Innovation Studies 2015/48, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    20. Michele Cincera & Pierre De Clercq & Thomas Gillet, 2015. "Optimal Openness Level and Economic Performance of Firms: Evidence from Belgian CIS Data," iCite Working Papers 2015-14, ULB -- Universite Libre de Bruxelles.
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