The geographic sources of foreign subsidiaries' innovations

Abstract

This study contributes to the literature on the nature and evolution of the multinational enterprise by exploring the geographic origins of the knowledge sources utilized by foreign subsidiaries during the process of technological innovation. Through a synthesis of the multinational literature and the broader literature on external sources of innovation, I develop and test a set of hypotheses that explain the conditions under which innovating subsidiaries are likely to draw upon sources of knowledge located in the home base of the firm and/or the subsidiary's host country environment. The hypotheses are tested through an analysis of the citations listed on over 10,000 patents issued to U.S. greenfield subsidiaries between 1980 and 1990. Copyright © 2001 John Wiley & Sons, Ltd.