IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v170y2023ics0305750x23001602.html
   My bibliography  Save this article

Do green foreign direct investments increase the innovative capability of MNE subsidiaries?

Author

Listed:
  • Amendolagine, Vito
  • Hansen, Ulrich Elmer
  • Lema, Rasmus
  • Rabellotti, Roberta
  • Ribaudo, Dalila

Abstract

Technologies to mitigate climate change may diffuse from lead markets to the rest of the world through several mechanisms and make important contributions to the global green transformation. In this paper, we explore the role played by multinational enterprises (MNEs) in transferring knowledge and innovative capabilities in green technologies to their global subsidiaries. We posit that the degree of green knowledge transfer and innovative capability development in subsidiaries depend on: (i) the host country characteristics, (ii) the specific technology in question, and (iii) the mode of entry. The empirical analysis combines data on foreign direct investments with patent analysis. The results suggest that being a subsidiary of a green MNE has a positive impact on the number and quality of green patents produced locally. This green innovative advantage vis-à-vis domestic companies is larger in less developed countries and in those that are less reliant on oil rents, in particular if they already possess higher levels of relevant domestic innovative capacity. Furthermore, firm and sectoral characteristics also matter. The analysis suggests that green FDIs are more effective when technologies are characterized by low tradability and tacit knowledge. Finally, cross-border acquisitions are more efficient at strengthening green innovative capabilities than subsidiaries established with greenfield investments.

Suggested Citation

  • Amendolagine, Vito & Hansen, Ulrich Elmer & Lema, Rasmus & Rabellotti, Roberta & Ribaudo, Dalila, 2023. "Do green foreign direct investments increase the innovative capability of MNE subsidiaries?," World Development, Elsevier, vol. 170(C).
    • Handle: RePEc:eee:wdevel:v:170:y:2023:i:c:s0305750x23001602
    DOI: 10.1016/j.worlddev.2023.106342
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X23001602
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.worlddev.2023.106342?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Ambos, Tina C. & Ambos, Björn, 2009. "The impact of distance on knowledge transfer effectiveness in multinational corporations," Journal of International Management, Elsevier, vol. 15(1), pages 1-14, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dachs, Bernhard & Amoroso, Sara & Castellani, Davide & Papanastassiou, Marina & von Zedtwitz, Max, 2024. "The internationalisation of R&D: Past, present and future," International Business Review, Elsevier, vol. 33(1).
    2. Corrocher, Nicoletta & Grabner, Simone Maria & Morrison, Andrea, 2024. "Green technological diversification: The role of international linkages in leaders, followers and catching-up countries," Research Policy, Elsevier, vol. 53(4).
    3. Carolina Castaldi, 2024. "Measuring innovation in international business research: how can trademark data help?," Journal of International Business Policy, Palgrave Macmillan, vol. 7(4), pages 466-475, December.
    4. Yi Qu & Chengang Wang & Yingqi Wei & Lichao Wu & Nan Zheng, 2024. "Does Eco-Innovation of Emerging Market Firms Benefit from Knowledge Spillovers of MNC in a Multi-dimensional Task Environment?," Management International Review, Springer, vol. 64(3), pages 527-565, June.
    5. Chen, Yuhuilin & Yuan, Ruizhi & Guo, Xinran & Ni, Tao, 2024. "Do foreign acquisitions improve target firms’ green innovation performance?," International Review of Economics & Finance, Elsevier, vol. 95(C).
    6. Benjamin Cornejo Costas & Nicola Cortinovis & Andrea Morrison, 2025. "How external linkages and informal institutions enable green innovation in EU regions," Papers in Evolutionary Economic Geography (PEEG) 2503, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Feb 2025.
    7. Tao, Zhe & Liu, Hanchao, 2024. "Compensation stickiness and firms' innovative capacity," Finance Research Letters, Elsevier, vol. 69(PA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Daojuan & Hain, Daniel S. & Larimo, Jorma & Dao, Li T., 2020. "Cultural differences and synergy realization in cross-border acquisitions," International Business Review, Elsevier, vol. 29(3).
    2. Peltokorpi, Vesa, 2015. "Corporate Language Proficiency and Reverse Knowledge Transfer in Multinational Corporations: Interactive Effects of Communication Media Richness and Commitment to Headquarters," Journal of International Management, Elsevier, vol. 21(1), pages 49-62.
    3. Victor Oltra & Jaime Bonache & Chris Brewster, 2013. "A New Framework for Understanding Inequalities Between Expatriates and Host Country Nationals," Journal of Business Ethics, Springer, vol. 115(2), pages 291-310, June.
    4. López-Sáez, Pedro & Cruz-González, Jorge & Navas-López, Jose Emilio & Perona-Alfageme, María del Mar, 2021. "Organizational integration mechanisms and knowledge transfer effectiveness in MNCs: The moderating role of cross-national distance," Journal of International Management, Elsevier, vol. 27(4).
    5. Lazarova, Mila & Peretz, Hilla & Fried, Yitzhak, 2017. "Locals know best? Subsidiary HR autonomy and subsidiary performance," Journal of World Business, Elsevier, vol. 52(1), pages 83-96.
    6. Yoon, Jisung & Park, Jinseo & Yun, Jinhyuk & Jung, Woo-Sung, 2023. "Quantifying knowledge synchronization with the network-driven approach," Journal of Informetrics, Elsevier, vol. 17(4).
    7. Najafi-Tavani, Zhaleh & Robson, Matthew J. & Zaefarian, Ghasem & Andersson, Ulf & Yu, Chong, 2018. "Building subsidiary local responsiveness: (When) does the directionality of intrafirm knowledge transfers matter?," Journal of World Business, Elsevier, vol. 53(4), pages 475-492.
    8. Sajjad Jasimuddin & Jun Li & Nicholas Perdikis, 2015. "Linkage between geographic space and knowledge transfer by multinational enterprises: a structural equation approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(3), pages 769-795, May.
    9. Helene Tenzer & Siri Terjesen & Anne-Wil Harzing, 2017. "Language in International Business: A Review and Agenda for Future Research," Management International Review, Springer, vol. 57(6), pages 815-854, December.
    10. 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.
    11. Rabbiosi, Larissa & Santangelo, Grazia D., 2013. "Parent company benefits from reverse knowledge transfer: The role of the liability of newness in MNEs," Journal of World Business, Elsevier, vol. 48(1), pages 160-170.
    12. Ambos, Tina C. & Ambos, Björn & Eich, Katharina J. & Puck, Jonas, 2016. "Imbalance and Isolation: How Team Configurations Affect Global Knowledge Sharing," Journal of International Management, Elsevier, vol. 22(4), pages 316-332.
    13. Davide Castellani, 2017. "The Changing Geography of Innovation and the Role of Multinational Enterprises," John H Dunning Centre for International Business Discussion Papers jhd-dp2017-02, Henley Business School, University of Reading.
    14. Fabian Jintae Froese & Dylan Sutherland & Jeoung Yul Lee & Yipeng Liu & Yuan Pan, 2019. "Challenges for foreign companies in China: implications for research and practice," Asian Business & Management, Palgrave Macmillan, vol. 18(4), pages 249-262, September.
    15. Lívia Lopes Barakat & Torben Pedersen & Marcio Amaral-Baptista & Sherban Leornardo Cretoiu & Paulo Bento, 2022. "Too Much of Two Good Things: Explicating the Limited Complementarity Between Drivers of MNC Headquarters’ Absorptive Capacity," Management International Review, Springer, vol. 62(3), pages 393-426, June.
    16. Nan Zhou & Heli Wang, 0. "Foreign subsidiary CSR as a buffer against parent firm reputation risk," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 0, pages 1-27.
    17. Liu, Meijun & Hu, Xiao & Wang, Yuandi & Shi, Dongbo, 2018. "Survive or perish: Investigating the life cycle of academic journals from 1950 to 2013 using survival analysis methods," Journal of Informetrics, Elsevier, vol. 12(1), pages 344-364.
    18. Cristina López-Duarte & Marta M. Vidal-Suárez & Belén González-Díaz & Nuno Rosa Reis, 2016. "Understanding the relevance of national culture in international business research: a quantitative analysis," Scientometrics, Springer;Akadémiai Kiadó, vol. 108(3), pages 1553-1590, September.
    19. Esther Tippmann & Pamela Sharkey Scott & Vincent Mangematin, 2014. "Subsidiary managers’ knowledge mobilizations: Unpacking emergent knowledge flows," Post-Print hal-00864324, HAL.
    20. de Jong, Gjalt & van Dut, Vo & Jindra, Björn & Marek, Philipp, 2015. "Does country context distance determine subsidiary decision-making autonomy? Theory and evidence from European transition economies," International Business Review, Elsevier, vol. 24(5), pages 874-889.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:170:y:2023:i:c:s0305750x23001602. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.