Regional and Global Technological Knowledge Search Strategies and the Innovative Performance of Large Multinational Corporations

Abstract

This study focuses on the innovative performance implications of large MNCs' regional and global technological knowledge search strategies. In networked MNCs, the parent can still offer valuable knowledge to subsidiaries. The parent's and a subsidiary's knowledge becomes complementary if an MNC appropriately adopts a global strategy at the parent level and a regional strategy at the subsidiary level. An analysis of the world's largest firms in the Electrical Equipment industry shows that, in general, a global strategy improves the innovative performance of the MNC. Meanwhile, only the combination of a global strategy at the parent level and a regional strategy at the subsidiary level is positively associated with the innovative performance of the MNC. This study contributes to the literature on networked MNCs and the debate of globalization and regionalization. Managerial implications are discussed as well.