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Innovation in multinational subsidiaries: The role of knowledge assimilation and subsidiary capabilities

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  • Anupama Phene

    (David Eccles School of Business, University of Utah, Salt Lake City, USA)

  • Paul Almeida

    (McDonough School of Business, Georgetown University, Washington DC, USA)

Abstract

Subsidiaries of multinational firms play an important role in the globalization of innovation, yet we have an incomplete idea of the influences on their innovative activity. Drawing on prior research in international business and strategy, we identify two sets of factors that influence the absorption and utilization of knowledge in multinational corporation subsidiaries: (a) the range of external and internal knowledge sources available; and (b) the subsidiary capabilities associated with knowledge absorption and utilization. We find that knowledge absorbed from the host country is useful to subsidiary innovation. We also find support for the role of subsidiary capabilities: both sourcing capability and combinative capability have a significant influence on the scale and quality of innovation. Journal of International Business Studies (2008) 39, 901–919. doi:10.1057/palgrave.jibs.8400383

Suggested Citation

  • Anupama Phene & Paul Almeida, 2008. "Innovation in multinational subsidiaries: The role of knowledge assimilation and subsidiary capabilities," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(5), pages 901-919, July.
  • Handle: RePEc:pal:jintbs:v:39:y:2008:i:5:p:901-919
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