Technological Complexity and the Restructuring of Subsidiary Knowledge Sourcing - A 'Phantom Picture of the MNC'?


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Abstract

This paper examines the implications of increasing technology complexity for patterns of knowledge sourcing in the multinational corporation (MNC). To better understand the increased capacity of subsidiaries for knowledge sourcing both inter- and intra-organizationally, we examine the influence of technological complexity on the knowledge sourcing patterns of foreign-owned subsidiaries in Germany. Focusing on the pharmaceutical industry, we find that as technological complexity rises, firms tend to increasingly rely on both their international and local inter-organizational networks to facilitate knowledge accumulation, but for different purposes. The international network is used for a more intensive cross-border exploitation of knowledge within a field, while the local external network is used increasingly for the exploration of new knowledge combinations across distinct and more distant fields. Our findings suggest that when subsidiaries build upon local external sources in their knowledge accumulation this entails an extension and restructuring of MNC international knowledge generation networks, and not a withering away of cross-border internal knowledge exchange in the MNC. 

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Patricia de Wilde-Mes
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