In Search of Platforms to Increase Market Responsiveness: Evidence from Foreign Subsidiaries

Abstract

Market responsiveness is one of several important outcome consequences that denote a foreign subsidiary's success. The authors examine how foreign subsidiaries can improve their market responsiveness through understanding the different roles of information system integration and knowledge codification in connection with related market knowledge that resides in their headquarters. The authors test hypotheses on data collected from 140 foreign subsidiaries in China. The results indicate that knowledge codification plays a key role in influencing market responsiveness directly and further acts as a critical mechanism that mediates the impacts of knowledge relatedness and information system integration on market responsiveness. The authors discuss the implications of these results for research and practice.