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The paradox of technological capabilities: a study of knowledge sourcing from host countries of overseas R&D operations


  • Jaeyong Song

    (Graduate School of Business, Seoul National University, Seoul, Korea)

  • Jongtae Shin

    (College of Management, Long Island University, Greenvale, USA)


We investigate the factors that influence the extent to which a multinational corporation's headquarters (MNC-HQ) sources knowledge from the host countries of its R&D labs. We propose that the technological capabilities held by MNC-HQs present a paradox. On the one hand, they enhance MNC-HQs' learning capabilities. On the other hand, they reduce MNC-HQs' motivations to outsource knowledge from host countries. We also argue that it is important to consider both relative and absolute levels of technological capabilities, because relative levels can influence MNC-HQs' motivations to source knowledge from host countries. Statistical findings generally support our arguments. Journal of International Business Studies (2008) 39, 291–303. doi:10.1057/palgrave.jibs.8400348

Suggested Citation

  • Jaeyong Song & Jongtae Shin, 2008. "The paradox of technological capabilities: a study of knowledge sourcing from host countries of overseas R&D operations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(2), pages 291-303, March.
  • Handle: RePEc:pal:jintbs:v:39:y:2008:i:2:p:291-303

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    Cited by:

    1. Blomkvist, Katarina & Kappen, Philip & Zander, Ivo, 2017. "Gone are the creatures of yesteryear? On the diffusion of technological capabilities in the ‘modern’ MNC," Journal of World Business, Elsevier, vol. 52(1), pages 1-16.
    2. Narula, Rajneesh & Michel, Julie, 2009. "Reverse knowledge transfer and its implications for European policy," MERIT Working Papers 035, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. Contractor, Farok & Yang, Yong & Gaur, Ajai S., 2016. "Firm-specific intangible assets and subsidiary profitability: The moderating role of distance, ownership strategy and subsidiary experience," Journal of World Business, Elsevier, vol. 51(6), pages 950-964.
    4. Giuditta De Prato & Daniel Nepelski, 2012. "International technology transfer between China and the rest of the world," JRC Working Papers JRC79397, Joint Research Centre (Seville site), revised Nov 2012.
    5. Iftekhar Hasan & Fahad Khalil & Xian Sun, 2017. "The Impacts of Intellectual Property Rights Protection on Cross-Border M&As," Quarterly Journal of Finance (QJF), World Scientific Publishing Co. Pte. Ltd., vol. 7(03), pages 1-35, September.
    6. repec:eee:iburev:v:26:y:2017:i:3:p:502-514 is not listed on IDEAS
    7. Petra Ahrweiler & Michel Schilperoord & Nigel Gilbert & Andreas Pyka, 2012. "Simulating the Role of MNCs for Knowledge and Capital Dynamics in Networks of Innovation," Chapters,in: Innovation and Institutional Embeddedness of Multinational Companies, chapter 6 Edward Elgar Publishing.
    8. Heechun Kim & Robert E. Hoskisson & Seung-Hyun Lee, 2015. "Why strategic factor markets matter: “New” multinationals' geographic diversification and firm profitability," Strategic Management Journal, Wiley Blackwell, vol. 36(4), pages 518-536, April.
    9. Smeets, Roger & Bosker, E.M., 2011. "Leaders, laggards and technology seeking strategies," Journal of Economic Behavior & Organization, Elsevier, vol. 80(3), pages 481-497.
    10. repec:spr:manint:v:49:y:2009:i:5:d:10.1007_s11575-009-0012-9 is not listed on IDEAS
    11. 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.
    12. Yuzhe Miao & Yuping Zeng & Jeoung Yul Lee, 2016. "Headquarters Resource Allocation for Inter-Subsidiary Innovation Transfer: The Effect of Within-Country and Cross-Country Cultural Differences," Management International Review, Springer, vol. 56(5), pages 665-698, October.
    13. Chen, Chung-Jen & Lin, Ya-Hui, 2016. "Managing the foreign investment portfolio: How industry and governance diversity influence firm performance," International Business Review, Elsevier, vol. 25(6), pages 1235-1245.
    14. Brian T. McCann & Jeffrey J. Reuer & Nandini Lahiri, 2016. "Agglomeration and the choice between acquisitions and alliances: An information economics perspective," Strategic Management Journal, Wiley Blackwell, vol. 37(6), pages 1085-1106, June.
    15. Jérôme Danguy, 2014. "Who collaborates with whom: the role of technological distance in international innovation," iCite Working Papers 2014-010, ULB -- Universite Libre de Bruxelles.
    16. Thomson, Russell, 2013. "National scientific capacity and R&D offshoring," Research Policy, Elsevier, vol. 42(2), pages 517-528.
    17. Minyoung Kim, 2016. "Geographic scope, isolating mechanisms, and value appropriation," Strategic Management Journal, Wiley Blackwell, vol. 37(4), pages 695-713, April.
    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. FUJIKAWA Naoto & MOTOHASHI Kazuyuki, 2016. "Absorptive Capacity and External Technology Sourcing: Empirical investigation of vertical and horizontal relationships in the research and development process," Discussion papers 16102, Research Institute of Economy, Trade and Industry (RIETI).
    20. Jérôme Danguy, 2014. "Globalization of Innovation Production: A Patent-Based Industry Analysis," iCite Working Papers 2014-009, ULB -- Universite Libre de Bruxelles.

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