Dual Embeddedness Research Articles

Reverse knowledge transfer in digital era and its effect on ambidextrous innovation: A simulation based on system dynamics

Knowledge transfer plays a prominent role in fostering innovation among multinational corporations (MNCs), however, the exploration of reverse knowledge transfer in today's digital era remains insufficient. Therefore, we explore the impact of reverse knowledge transfer on ambidextrous innovation and the process mechanism against the backdrop of digital technology. A system dynamics model of reverse knowledge transfer is constructed from three aspects: knowledge acquisition, knowledge absorption and knowledge application. Our simulation results indicate that the dual embeddedness of multinational R&D centers promotes knowledge acquisition and absorption, enhances the knowledge base of parent companies, and facilitates ambidextrous innovation. In particular, the application of digital technology further promotes the process through knowledge absorption, with the long-term impact more pronounced. This study not only enriches the literature on reverse knowledge transfer but also expands the application of digital technology in the field of MNCs' innovation.

Sustainable mining: Examining the direct and configuration path of legitimacy pressure, dual embeddedness resource dependency and green mining towards resource management

The mining industries' contribution to economies has been limited to the boomtown's impact of short-term initiatives. However, the bane of mining on resource management has been a recurring theme. This study recognizes the need to investigate the interrelationship among legitimate pressure, resource dependence, and green practices in the quest for sustainable resource management. The study categorized legitimate pressure into three distinct groups (coercive, normative, and mimetic pressure) and resource dependence into intra and inter-organizational resource dependence to assess the interrelationship among these constructs. We use both the structural model and the fuzzy set qualitative comparative analysis (fsQCA) approach and 320 respondents from the Ghanaian mining industry.According to our findings, normative pressure does not influence the implementation of green mining policies without the two groups of resource dependencies acting as mediators.The findings from the fSQCA have shown that the combination of coercive pressure, normative pressure, inter-organizational resource dependencies, and intra-organizational resource dependencies is the best path toward sustainable resource management. The study contributes to the global efforts toward sustainable resource management. Policy and managerial implications are discussed.

The dual knowledge role of open innovation intermediaries: Internal weaving and external filtering for MNE subsidiaries

Developing dual embeddedness for subsidiaries with competence-creating mandates in multinational enterprises (MNE) presents contradictory knowledge demands in internal and external networks that hamper their innovative capacity. Sourcing knowledge externally and transferring this across the MNE is a delicate yet demanding balancing act, and scholars suggest that competence-creating subsidiaries achieve this by building firm-specific innovative capabilities. Although open innovation (OI) studies contend that intermediaries may be important in connecting subsidiaries locally, we have yet to fully understand if, and how, these intermediaries influence subsidiary dual embeddedness. Through an exploratory qualitative case study design, we find that an OI intermediary performs a critical dual knowledge role through internal weaving and external filtering in helping subsidiaries navigate the conflicting knowledge challenges of dual embeddedness. Specifically, we disentangle how performing this role requires the OI intermediary to habitually engage in a range of complementary activities that enhance intra-firm knowledge transfer both vertically and laterally, to and from the subsidiary, as well as expanding the capacity of the subsidiary to source knowledge externally in their local network. In spotlighting the intermediary-subsidiary interface, our findings generate greater integration between the literature in international business (IB) and open innovation, specifically subsidiary dual embeddedness, and OI intermediaries.

Entrepreneurial pursuits of women and men in the diaspora from MENA: dual embeddedness in home- and host-societies

Entrepreneurial pursuits of women and men in the diaspora from MENA: dual embeddedness in home- and host-societies

Entrepreneurial pursuits of women and men in the diaspora from MENA: dual embeddedness in home- and host-societies

Entrepreneurial pursuits of women and men in the diaspora from MENA: dual embeddedness in home- and host-societies

The Multiple Dimensions of Embeddedness of Small Multinational Enterprises

AbstractThis research investigates how small multinational enterprises (small MNEs) internationalize by opening branch offices or subsidiaries in foreign markets, managing their multiple embeddedness in their host and home locations, and their subsidiaries’ dual embeddedness in external environments and within their organizations. We study four small multinational enterprises, two each from the small open economies of New Zealand and Finland, and we use literature from entrepreneurship and international business to derive a model of these multiple dimensions of embeddedness. The cases illustrate how firms can become more (or less) embedded in their locations through their physical presence, operations, key employees, and local hires while achieving internal organizational embeddedness through their corporate structure and social and technological bridging. Our research gives insight into how small MNEs may overcome their liabilities of smallness, foreignness, and outsidership by drawing on resources from home and host locations and sharing this throughout the organization.

Organizational identity work in MNE subsidiaries: Managing dual embeddedness

Organizational identity work in MNE subsidiaries: Managing dual embeddedness

The foreignness effect on internationalisation depth: the perspective of multicomplexity and the duality of foreignness

PurposeThe literature on foreignness has, to date, stressed the liability of foreignness (LOF) and the advantage of foreignness (AOF). Drawing on industrial organisation theory, institutional theory, the resource-based view of the firm and the literature on networking, the authors’ research develops an integrated framework to explore the impact of foreignness on internationalisation depth from the perspective of the duality of foreignness (LOF versus AOF) within multiple dimensions. These dimensions are isomorphism, home country of origin, institutional distance and dual embeddedness of multinational enterprises (MNEs).Design/methodology/approachIn this study, the authors empirically test hypotheses arising from this new theoretical framework by examining the characteristics of a sample of 324 Chinese MNEs (CMNEs) that were operating in 63 countries from 1999 to 2018. Employing regression analysis on a panel of 9,410 observations, the results show that foreignness does exhibit multilevel complexity and duality.FindingsThe authors’ empirical results show that isomorphism pressures, country of origin and institutional distance have a negative effect on internationalisation depth (as an outcome of LOF) but that dual embeddedness, on the part of MNEs, exerts a positive impact on internationalisation depth (as an outcome of AOF). The implications for research on multilevel complexity and the duality of foreignness are discussed, and managerial implications are outlined.Research limitations/implicationsThe implications of the authors’ findings for MNEs should not be generalised to developed countries without examining the characteristics of both China as an emerging country and its MNEs. The second limit is regarding ownership; this framework has limitations due to choosing China and its OFDIs for testing internationalisation depth. Finally, for subsequent research, examining the dynamics of foreignness completes the nature of multicomplexity, defined by external and internal factors of foreignness changing over time and space.Practical implicationsCMNE managers are advised to actively scrutinise their behaviours in the local country to overcome the differences in routines, values and practices inherent in local institutions (Chen et al., 2019). The results imply that CMNEs should be careful not to overuse their home country image when penetrating a new market. Thus, a strategy to reduce a home government's hegemonic or otherwise negative image may be wise when operating abroad. Finally, the authors’ model suggests that CMNEs equipped with great RCN CIPs for identifying, scanning and interpreting local institutions can enhance internationalisation depth.Originality/valueThe authors’ research contributes to research on foreignness by emphasising foreignness as a construct of multilevel complexity. The authors argue that foreignness arises due to varying factors at the host, home, host-home levels and at the level of the organisational entity. The authors’ definition of foreignness and empirical results supports the notion that isomorphism pressures (host country-level factors), country-of-origin of home country (home country-level factors) and institutional distance (host-home country-level factors) are inextricably negatively linked with internationalisation depth (as effects of LOF). By contrast, the dual embeddedness of MNEs (the factor of organisational level) represents a positive relationship with internationalisation depth (as effects of AOF).

The synergy of inventor cooperative network dual embeddedness and firm innovation: the mediating role of ambidextrous learning

ABSTRACT Dual embeddedness of inventors’ cooperative networks influences firm innovation. This paper explores the mechanism of synergy between network structural embeddedness (network centrality and structural hole) and relational embeddedness (relational strength) on firm innovation using data from Chinese listed automobile companies. This paper further explores the mediating role of exploitative learning and exploratory learning between the synergy of cooperative network dual embeddedness and innovation. The results show that the synergy of network centrality and relational strength hinders innovation, while the synergy of the structural hole and relational strength promotes innovation. The synergy of centrality and relational strength hinders exploitative learning, while the synergy of the structural hole and relational strength promotes exploitative learning. Exploitative learning plays a mediating role between synergy of structure and relational embeddedness and innovation.

Managing internal embeddedness in multinational corporations’ R&D subsidiaries: An evolutionary perspective on the automotive industry in Silicon Valley

This paper analyses the processes through which multinational corporations' R&D subsidiaries conduct dual embeddedness from an internal embeddedness approach. While most studies that adopt a dual embeddedness perspective have analysed the influence of internal embeddedness on external embeddedness as a single effect (positive or negative), we offer a different stance by considering it through a double-edged effect. We conduct a multiple case study of R&D subsidiaries located in Silicon Valley and belonging to eight of the world's largest automotive manufacturing multinational corporations. By adopting an evolutionary perspective based on an analysis of a 23-year period (1995–2018), we find and unravel how to manage the double-edged effect of R&D subsidiaries' internal embeddedness on the development of external embeddedness by specifying two main levers: the autonomization of R&D subsidiaries and the headquarters' knowledge support of the subsidiaries. Our findings thus advance the understanding of R&D subsidiaries' dual embeddedness and external knowledge sourcing in technological contexts by proposing a model of the double influence of internal embeddedness on external embeddedness.

Southeast Asian Chinese engage a rising China: business associations, institutionalised transnationalism, and the networked state

ABSTRACT With the launching of China’s ambitious Belt and Road Initiative (BRI) in 2013, Chinese diaspora in Southeast Asia have been confronted with both growing business opportunities and emerging challenges. How do ethnic Chinese businesses and their associations respond to the BRI, and by extension, a rising China? How do transnationalism and the nation-states shape their engagement strategies? What are the implications of the Southeast Asian experience for an understanding of diaspora transnationalism? Drawn upon empirical studies conducted in Singapore, Malaysia and the Philippines, and by examining the emergence of the new structural characteristics of Chinese business associations, we argue that these associations have formed institutionalised transnational interactions with China through a variety of mechanisms to facilitate cross-border flows of capital, goods, people, and information. Resultant from various policies instituted by the Southeast Asian states, this economic transnationalism has not led to the dilution of the national identity and political loyalty of ethnic Chinese towards their respective countries. We conclude that the institutionalised transnationalism has operated within a ‘dual embeddedness’ structure in which the state is involved as a key network node in the transnational socio-economic field connecting China and the region.

The role of subsidiary dual embeddedness and absorptive capacity in a transition economy

PurposeThis study aims to focus on dual embeddedness as an important channel through which foreign subsidiaries access and share valuable and idiosyncratic knowledge within the multinational corporation (MNC). The authors examine the dual embeddedness challenges of foreign subsidiaries based in the context of Iran as a transitional market.Design/methodology/approachThe final sample includes 144 active foreign subsidiaries in Iran from across a broad range of industries. A structured questionnaire was distributed to firms and structural equation modeling was adopted to analyze the results.FindingsThe findings reveal how building external embeddedness in an environment with potentially poor access to valuable knowledge, and risk of knowledge leakage impacts the subsidiary’s ability to subsequently transfer this knowledge within the MNC. The authors identify the significance of absorptive capacity as a way for the subsidiary to access knowledge from and share knowledge with firms in the local market.Originality/valueDeparting from existing work on subsidiary embeddedness in developed markets, the authors reveal how competence creating subsidiaries manage dual embeddedness and knowledge transfer in transition economies that are low in knowledge stocks. The authors unpack how subsidiary absorptive capacity enables access to local knowledge in a transitional market and increases reverse knowledge transfer in the MNC. In doing so, the authors answer calls for work on the dynamic and complementary relationships that exists between subsidiary dual embeddedness, absorptive capacity and knowledge sourcing in less open markets. Focusing on Iran as a transitional economy, this study provides greater contextual nuance to the extant literature on subsidiary dual embeddedness.

Autonomy and MNE Support for Initiatives: Roles of Embeddedness and Organizational Structures

In this study we examine the relationship between subsidiary autonomy and the initiative resource support a subsidiary requests and receives from the MNE. Drawing on resource dependence, social exchange and organizational theoretical perspectives, we propose some underlying mechanisms as external embeddedness, reverse knowledge transfers, and MNE organizational structures to explain the relationship between subsidiary autonomy and MNE subsidiary initiative collaboration. We draw on survey data from 429 foreign-owned subsidiaries in New Zealand and employ structural equation modelling. Results show that the direct relationship between subsidiary autonomy and the receipt of MNE resource support for initiatives is negative and this is more likely the case where the subsidiary is managed under simple structures (i.e. subsidiary reports to corporate headquarters, regional headquarters, or mandated units) rather than complex structures (i.e. matrix or network). Furthermore, an increase in subsidiary autonomy positively influences MNE initiative resource-seeking and this is more likely the case where the subsidiary is less embedded externally. Subsidiary initiative resource-seeking from the MNE is positively associated with the subsidiary initiative resource-receipt from the MNE, and this is more likely the case where the subsidiary is engaged in reverse knowledge transfers. This study contributes by extending the research on subsidiary autonomy, dual embeddedness, organizational structures, and subsidiary initiatives. It contributes by showing how dual embeddedness, and the complexity of organizational structures determine the relationship between subsidiary autonomy and MNE subsidiary initiative collaboration.

What Do We Know About Multinational Enterprises’ Internationalization Process and Innovation?

This study reviews research from 1989 through 2019 on whether and how multinational enterprises (MNEs) augment their innovation capabilities throughout the entire internationalization process. To identify the current state of knowledge of this research, we review the literature using bibliometric and qualitative content analyses covering leading journals. We categorize existing studies into three key stages: (1) preinternationalization stage, (2) internationalization entry stage, and (3) internationalization operation stage. Further, we review how different internationalization strategies in the internationalization process, country institutions, and MNE characteristics jointly influence MNEs’ innovation behaviors and innovation outcomes. Finally, we highlight key questions and challenges in the extant literature and provide suggestions for future research to advance the developments of this domain, including (1) deepening discussions on international diversity and innovation, (2) emphasizing the impact of MNEs’ network attribute and dual embeddedness on innovation, and (3) extending the role of institutions in MNEs’ innovation.

Refugee Entrepreneurs’ Opportunity Production Process – Process Characteristics and Embeddedness

In this paper, we observe the opportunity production processes among aspiring refugee entrepreneurs in their host countries. Our process data from eighteen refugee entrepreneurs reveal heterogeneity in how entrepreneurs move across the opportunity production stages of conceptualization, objectification, and enactment. We identify four patterns of sequence which we find to be characterized by differences in continuity, iteration, and order. By theorizing on process characteristics and connecting these to dual embeddedness, we provide insights into how use of networks from home versus host countries together with cognition help increase the accuracy of opportunity production theory of entrepreneurs who face discontinuity in their lives.

The interaction between supply networks and internal networks: performance implications

PurposeThe importance of the supply network to firm performance is well documented. Until now, the firm and its suppliers have been conceptualized as single entities. Yet, multinational corporations (MNCs) are composed of a complex, geographically dispersed internal network of subsidiaries. The supply and internal networks are inherently linked. The purpose of this study is to investigate the impact of the interaction of these networks on firm-level financial performance.Design/methodology/approachBuilding on supply network, internal network and dual embeddedness research, the authors investigate the interaction of these networks using supply network data from FactSet and internal network data from Orbis. We assess the impact at the MNC level, using measures of firm-level financial performance, physical proximity between the two networks and geographic dispersion of the internal network.FindingsThe results show that the performance effect of physical proximity of the firm with its supply network is negatively moderated by the geographic dispersion of the firm's internal network. This effect can be traced back to the diminishing marginal profitability of a firm's assets. Moreover, the benefits of dual embeddedness to the individual subsidiary come at a cost at the firm-level due to the operational challenges of managing a complex subsidiary network.Research limitations/implicationsThis study is the first to investigate the supply and internal networks of MNCs simultaneously.Originality/valueThe paper extends supply network literature by considering the internal network of the focal firm and its suppliers. This paper is one of the first studies that offer an understanding of the interaction between supply and internal networks of a focal firm and the effect on financial performance.

Dual embeddedness? Innovation capabilities, multinational subsidiaries, and solar power development in South Africa

One longstanding strand of research in the development studies literature has concerned itself with the development of innovation capabilities in developing-country firms. As most of this literature focuses on domestic firms, foreign-owned firms, such as subsidiaries of multinational companies (MNC), have received much less attention. In this paper, we address this knowledge gap by conducting an in-depth study exploring the learning and capability-building trajectory of a single MNC subsidiary operating in the market for solar power in South Africa. We employ a conceptual framework enabling us to explore capability building arising from the dual embeddedness of the subsidiary respectively in the corporate network of the parent company and the host economy in South Africa. We find that the subsidiary managed to achieve an advanced level of innovation capabilities in a short period. Initially, learning through interaction with the parent company and firm-internal learning in the subsidiary were found to have been essential in the early stage of the capability building process. Learning through collaboration with local research institutes became important only after a certain level of capabilities had already been acquired. Learning by hiring was important throughout, but it became gradually more important in parallel with the increasing specialisation of the local workforce in solar power projects. Our findings are particularly relevant for a new type of 'born global' MNCs that is becoming dominant in the global market for renewable energy. Finally, we point to the importance of regulatory conditions in shaping the degree of knowledge transfer and capability building of MNC subsidiaries.

Institutional Distance and MNE‐subsidiary Initiative Collaboration: The Role of Dual Embeddedness

Entrepreneurial initiatives by subsidiaries are greeted as well as contested. We examine the effect of institutional distance between the host country of a subsidiary and the home country of its parent multinational enterprise (MNE) on the resource support a subsidiary receives from the MNE for its entrepreneurial initiatives. Drawing on social exchange theory, and resource dependence theory, we argue that while informal institutional distance inhibits MNE resource support for initiatives, and formal institutional distance further exacerbates the subsidiaries' options, external embeddedness and reverse knowledge transfers may help subsidiaries bypass the negative effects of institutional distance and encourage MNE involvement in subsidiary initiatives. Using survey data from 429 foreign subsidiaries in New Zealand, and secondary data on formal institutional distance from the Worldwide Governance Indicators, the results from structural equation modeling provide support to our hypotheses. This study extends institutional distance, embeddedness, and subsidiary initiative research. Importantly, it contributes by demonstrating how contingencies such as dual embeddedness and (low) formal institutional distance can counterbalance the negative effects of informal institutional distance on subsidiary initiatives and MNE‐subsidiary initiative collaboration.

The roles of dual networks and ties on absorptive capacity in SMEs: the complementary perspective

Drawing from social network theory with dual embeddedness and dual ties perspectives, the main purpose of this study is to examine the differing influences of weak ties and strong ties in the supply chain network and competitive network on potential and realised absorptive capacity. According to the empirical results, the weak ties both in the supply chain network and competitive network are positively related to a firm’s potential absorptive capacity, while weak ties in the competitive network are more powerful in improving potential capability. The strong ties both in the supply chain network and competitive network are positively related to a firm’s realised absorptive capability, while strong ties in the supply chain network are more effective in realised absorptive capability. Besides, complementary term (the product term of potential absorptive capacity and realised absorptive capacity) has significant effects on a firm’s innovative performance. Finally, we discuss implications of this research and offer suggestions for future research.

Fuzzy regression model for forecasting impact of venture capital network and underwriter network on IPO premium

In recent years, social network analysis is one of the top 20 fields of artificial intelligence. Based on the network signal theory, this study examines the influence of the dual network embeddedness on the premiums of Chinese initial public offerings (IPOs). In this paper we proposed fuzzy regression model for forecasting the impact of venture capital network and underwriter network on IPO premium based on some hypothesis. We find that: (1) Enterprises embedded in the central position of venture capital network will increase the IPO secondary market premium; (2) Secondly, employing underwriter in the central position of underwriting network will increase the IPO secondary market premium; (3) As venture capital are getting closer to the central position of venture capital network, the influence of underwriter network centrality in underwriting network on the increase of IPO secondary market reaction will gradually weaken. The research shows that occupying central position both in venture capital syndication network and underwriting network have the functions of sending signals, then increase the IPO secondary market premium, but the functions of different network signals will replace each other.