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Exploring the paradox of competence‐creating subsidiaries : balancing bandwidth and dispersion in MNEs

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  • Narula R.

    (UNU-MERIT)

Abstract

This paper seeks to synthesise the various contributions to the special issue ofLong Range Planning on competence-creating subsidiaries CCS, and identifies avenues for future research. Effective competence-creation through a network of subsidiaries requires an appropriate balance between internal and external embeddedness. There are multiple types of firm-specific advantages FSAs essential to achieve this. In addition, wide-bandwidth pathways are needed with collaborators, suppliers, customers as well as internally within the MNE. Paradoxically, there is a natural tendency for bandwidth to shrink as dispersionincreases. As distances technological, organisational, and physical become greater, there may be decreasing returns to MNE spread. Greater resources for knowledge integration and coordination are needed as intra- and inter-firm RD cooperation becomes more intensive and extensive. MNEs need to invest in mechanisms to promote wide-bandwidth knowledge flows, without which widely dispersed and networked MNEs can suffer from internal market failures.

Suggested Citation

  • Narula R., 2013. "Exploring the paradox of competence‐creating subsidiaries : balancing bandwidth and dispersion in MNEs," MERIT Working Papers 046, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2013046
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    File URL: https://www.merit.unu.edu/publications/wppdf/2013/wp2013-046.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Multinational Firms; International Business; Business Economics; Economic Sociology; Economic Anthropology; Social and Economic Stratification;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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