Abstract
Existing studies provide insufficient information regarding why reverse transfer of innovation does not necessarily lead to subsidiary power gains. Informed by issue selling perspectives, we examine how reverse transfer of innovation impacts subsidiary power through formal attention of the parent company. Using data collected from a multiple-informant survey of 145 MNC subsidiaries, the results reveal that formal attention of the parent company fully mediates the relationship between reverse transfer of innovation and subsidiary power. Moreover, this indirect relationship is moderated by business culture specificity and intrafirm competition intensity. The effect of reverse transfer of innovation on subsidiary power through formal attention of the parent company is weaker when business culture specificity and intrafirm competition intensity are high.
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