Effects of the Subsidiaries' Networks on the Service Multinationals Innovation Activity

Abstract

This research explores how subsidiary embeddedness in different networks, both internal and external to the firm, contributes to the innovation of the service multinational corporation (MNC). Specifically, the authors analyze the different effects of networks on MNC’s subsidiaries performing competence-creating or competence-exploiting innovation activities, in the context of the service industry. The present study analyzes the data of 178 foreign-owned subsidiaries in the service sector performing innovation in Spain. The results of data analysis at two points in time show that external and internal embeddedness have a positive impact on the subsidiary innovation. Moreover, external embeddedness has a major positive influence on the competence-creating rather than on the competence-exploiting activities, while the internal embeddedness is equally important for both types of innovation. Therefore, this study contributes to further our understanding of how subsidiaries’ linkages affect innovation of the service MNC.

Citation

Miravitlles, P., Achcaoucaou, F. and Spieth, T.L. (2023), "Effects of the Subsidiaries' Networks on the Service Multinationals Innovation Activity", Fernández Pérez, P. and San Román, E. (Ed.) Collective Entrepreneurship in the Contemporary European Services Industries: A Long Term Approach (Frontiers of Management History), Emerald Publishing Limited, Leeds, pp. 135-151. https://doi.org/10.1108/978-1-80117-950-820231009