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Knowledge outflows from foreign subsidiaries: The tension between knowledge creation and knowledge protection

Author

Listed:
  • Alessandra Perri

    (Department of Management, Università Ca' Foscari Venezia)

  • Ulf Andersson

    (Department of Strategic Management and Globalization, Copenaghen Business School)

Abstract
This paper analyzes the MNC subsidiaries' trade-off between the need for knowledge creation and the need for knowledge protection, and relates it to the extent of knowledge outflows generated within the host location. Combining research in International Business with Social Theory, we find that subsidiaries that extensively draw on external knowledge sources are also more likely to generate knowledge outflows to local firms. We argue that this may be explained by the subsidiariesÕ willingness to build the trust that facilitates the establishment of reciprocal knowledge linkages. However, when the value of the subsidiary's knowledge stock is very high, the need for knowledge protection restrains reciprocity mechanisms in knowledge exchanges, thus reducing the extent of knowledge outflows to the host location. This study contributes to the literature on the firm-level antecedents of FDI-mediated local knowledge outflows, as well as to the broad IB literature on the relationship between subsidiaries and their host regions. The implications for managers and policy-makers are also discussed.

Suggested Citation

  • Alessandra Perri & Ulf Andersson, 2012. "Knowledge outflows from foreign subsidiaries: The tension between knowledge creation and knowledge protection," Working Papers 18, Venice School of Management - Department of Management, Università Ca' Foscari Venezia.
    • Handle: RePEc:vnm:wpdman:31
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    References listed on IDEAS

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    2. Badi H. Baltagi & Peter H. Egger & Michaela Kesina, 2016. "Firm‐Level Productivity Spillovers in China's Chemical Industry: A Spatial Hausman‐Taylor Approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 31(1), pages 214-248, January.

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    More about this item

    Keywords

    local knowledge outflows; FDI; knowledge creation; knowledge protection;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration

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