Attention green aliens? Activities of multinational enterprises in host countries and eco-innovation diffusion

Abstract

This paper investigates the extent to which eco-innovation activities in multinational enterprises (MNEs) in a host country affects local firms. In the attention-based view, the organizational attention field is significant for innovation. By analyzing the Korean Innovation Survey and patent data, we find that as more foreign MNEs conduct eco-innovation locally, attention to environmental issues increases in local firms. Their attention field particularly benefits from the presence of foreign MNEs whose country-of-origin is close to the host country or who have a long-term presence in the host country. A larger attention field then improves the likelihood of local firms successfully implementing eco-innovation and can accelerate eco-innovation implementation; however, this effect is observed only in large local firms and thus able to redeploy abundant internal resources.