How Do MNCs Conduct Local Technological Innovation in a Host Country? An Examination From Subsidiaries' Perspective

Abstract

The growing tendency of local technological innovation (LTI) of multinational corporations (MNCs), together with the increasing significance of subsidiaries in MNCs' overseas operations, are promoting subsidiaries' engagement in conducting LTI activities in a host country. In this research, a systematic review methodology with the identification of 116 articles is adopted for the purpose of explicating MNCs' holistic and dynamic LTI process from subsidiaries' perspective. Concretely, we propose a thorough framework upon the typical input-process-output model by taking the antecedents, mechanisms, and consequences into consideration about the whole LTI process. It is suggested in this review that the trigger logic of LTI activities can be explained as the interactions between firm-specific advantages and country-specific advantages that took place at subsidiaries. Crucially, the elaborations on LTI mechanisms have been extended by means of evoking a duality lens of the top-down and the bottom-up pattern. Finally, the results show that differential consequences of LTI activities are presented by bringing divergent benefits to different parties. More importantly, the subsidiary takes the unique role in fostering a virtuous loop between dualistic LTI patterns. Overall, these insights reflect what we have obtained from extant literature and the challenges international business landscapes have ahead, which could point to the directions of future research.