Abstract
This paper explores the relationship between internal R&D collaboration and subsidiary exploration in multinational corporations (MNCs). We argue that R&D collaboration within MNCs will decrease subsidiary exploration by strengthening subsidiaries’ internal embeddedness. We tested our hypotheses using patent data of major semiconductor firms from 1989 to 2008. The results suggest that subsidiaries are less likely to explore technologies that are new to MNCs when internal collaboration increases. In addition, this effect is strengthened when headquarters have higher technological capability, but is weakened when R&D collaboration with local partners in host country increases.
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