AIB 2012 Conference Proceedings - Academy of International ...

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firms, we argue for an advantage of foreignness. We propose that skills of employees of subsidiaries of foreign
MNEs have a larger positive effect on innovation than skills of employees in domestic firms. The reason is that
being part of the foreign MNE, subsidiaries manage employees to be more cosmopolitan whereas domestic
firms tend to manage employees to be more local. Although initially managed this way to facilitate better
integration with the MNE, the more cosmopolitan employees of the subsidiaries of foreign MNEs are better at
searching for and integrating diverse knowledge to generate innovations than employees of domestic firms.
Word count: 149 Key words: cosmopolitan, local, innovation, advantage of foreignness, multinational
companies (For more information, please contact: Annique Un, Northeastern University, USA: a.un@neu.edu)
Foreign vs. Domestic: What Determines the Origin of Chinese Firms' Inward Technology Licensing
Ying Li, Technical University of Denmark
Yuandi Wang, Technical University of Denmark
The increasing prominence of cross-border technology sourcing urges us to ask a question: what factors and
conditions may influence firms' decisions of sourcing technology domestically or internationally Research on
this topic is scattered in the literature but a comprehensive understanding of these factors and conditions on
this issue is still lacking. The aim of this paper thus is to establish a comprehensive framework that integrates
factors affecting a firm's propensity to make technology sourcing decisions regarding foreign or domestic origins
of technologies. We identify four distinct categories of factors that are relevant in this respect: (1) technology
supplier's characteristics; (2) technology seeker's characteristics; (3) features of technology itself; and (4)
external contextual factors. We test our hypotheses based on Chinese firms' inward technology licensing. We
found well-established incumbent firms that are export-, and high-tech-oriented with strong absorptive capacity
are more likely to in-license foreign technology rather than domestic ones if the in-sourced technology is
mature, the technology suppliers have strong desorptive capacity, and the external knowledge environment is
innovative. (For more information, please contact: Ying Li, Technical University of Denmark, Denmark:
ying@business.dtu.dk)
Knowledge Sourcing and Knowledge Accumulation through General Purpose Technologies in Foreign
Subsidiaries
Ranfeng Qiu, California State University San Bernardino
By studying the innovative activities of the U.S subsidiaries of large non-U.S firms from 1969-1995 based on
patent counts and patent citations, this research suggests that internationalization of innovations of
Multinational Corporations (MNCs) is closely linked to the development of General Purpose Technologies in
foreign subsidiaries. GPTs make feasible the combination and recombination of technology from different
domains on an international scale. Innovations in GPT fields help MNCs re-allocate competence-creating
activities to at least some foreign subsidiaries which become the new "centers of excellence" to these firms.
This internationalization allows MNCs to maximize the opportunities to develop new growth alternatives. Our
study suggests that the development of technologies in GPT fields as peripheral technologies in a subsidiary is
positively associated with the degree of technological diversification and the innovative capacity of that
subsidiary, as well as the degree of geographical dispersion of MNC group innovative activities in the host
country. Moreover, local specializations in non-primary GPT fields help increase the sectoral diversification of the
innovation cluster in which the subsidiary is sited. (For more information, please contact: Ranfeng Qiu,
California State University San Bernardino, USA: rqiu@csusb.edu)
Expansion of Vertical Integration as a Knowledge Accessing Strategy in the Face of Unfavorable Network
Embeddedness and Absorptive Capacity
Florian Zock, University of Mannheim
Suleika Bort, University of Mannheim
Andreas Al-Laham, University of Mannheim
AIB 2012 Conference Proceedings
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