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Diffusion Patterns of Technological Capabilities - The Difference between Greenfield and Acquired Advanced Foreign Subsidiaries
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
(English)Manuscript (preprint) (Other academic)
Abstract [en]

This paper examines longitudinal patterns in the diffusion of technological capabilities in the MNC. More specifically, it empirically investigates the diffusion of technological capabilities from advanced foreign subsidiaries to headquarters and sister subsidiaries, at the same time incorporating the effects of inter-subsidiary differentiation. The complete U.S. patenting activity by 23 Swedish multinationals over the 1893-1990 period reveals a significant difference in diffusion patterns between greenfield and acquired advanced foreign subsidiaries. This suggests that in, the previous literature, the difference has been overlooked and the question how the choice of entry mode influences diffusion patterns of technological capabilities within MNCs has been underestimated as well as the different roles of greenfield and acquired advanced foreign subsidiaries as providers of technological capabilities to headquarters and other subsidiaries in the multinational group.

National Category
Business Administration Social Sciences
Research subject
Business Studies
Identifiers
URN: urn:nbn:se:uu:diva-108307OAI: oai:DiVA.org:uu-108307DiVA: diva2:235264
Available from: 2009-09-14 Created: 2009-09-14 Last updated: 2015-02-06
In thesis
1. Technological Growth in the MNC: A Longitudinal Study of the Role of Advanced Foreign Subsidiaries
Open this publication in new window or tab >>Technological Growth in the MNC: A Longitudinal Study of the Role of Advanced Foreign Subsidiaries
2009 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis emphasizes the technological evolution of technologically advanced foreign subsidiaries of multinational corporations, in order to examine specific and related research questions as to what is the nature of the advanced modern MNC regarding technological growth. In particular, evolutionary paths and potential limits to the development of technological capabilities at the level of individual foreign subsidiaries, and to what extent these subsidiaries serve as significant sources of technological capabilities for other actors in the multinational group are highlighted. More specific, longitudinal patterns and pace in the emergence and diffusion of new technological capabilities by advanced foreign subsidiaries are studied.

 

Event history analysis of the complete U.S. patenting activity of 23 Swedish multinationals over the 1893-1990 time period reveals accelerated emergence of new technological capabilities by advanced foreign subsidiaries, but at moderate hazard rates. The results also show that there are substantially different probabilities of introducing new technological capabilities depending on the type of entry mode and that acquired subsidiaries are much more important than greenfield subsidiaries as growth engines for the technological renewal of the MNC. Moreover, the findings suggest the presence of an increased pace in reverse diffusion, hence the later into the time period a technological capability emerges in an advanced foreign subsidiary, the faster it is diffused to headquarters. The results also demonstrate that the type of subsidiary has a significant influence on diffusion patterns of new technological capabilities and thus how capabilities are leveraged throughout the MNC network.

 

To conclude, a balanced view on the creative capabilities of the MNC seems to be called for. The modern MNC does have and display many of the features of the modern MNC as identified in previous literature, but the expectations traditionally and generally expressed in the literature may have been an overstatement of actual conditions and developments. The ultimate technological limits of advanced foreign subsidiaries seem far from reached, and the final word on the ultimate importance of these subsidiaries as significant sources of new technological capabilities for other actors in the MNC is still to be spoken.

Place, publisher, year, edition, pages
Uppsala: Företagsekonomiska institutionen, Uppsala universitet, 2009. 75 p.
Series
Doctoral thesis / Företagsekonomiska institutionen, Uppsala universitet, ISSN 1103-8454 ; 144
Keyword
Multinational corporation, foreign subsidiary, technology, capability emergence, capability diffusion
National Category
Business Administration
Research subject
Business Studies
Identifiers
urn:nbn:se:uu:diva-107950 (URN)
Public defence
2009-10-02, Hörsal 2, Ekonomikum, Kyrkogårdsgatan 10, Uppsala, 14:15 (English)
Opponent
Supervisors
Available from: 2009-09-01 Created: 2009-09-01 Last updated: 2009-09-24Bibliographically approved

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Blomkvist, Katarina

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