AIB 2012 Conference Proceedings - Academy of International ...

TUESDAY
innovation while other routines become critical at a later stage. Differences in effectiveness of AC routines and
underlying mechanisms in turn can be traced back to organizational antecedents and to individual actors
involved in the implementation of the innovation. (For more information, please contact: Carine Peeters,
Université libre de Bruxelles, Belgium: carine.peeters@ulb.ac.be)
The Global Co-Evolution of Firm Boundaries: Commoditization, Capabilities, and Paths Dependencies
Stephan Manning, University of Massachusetts Boston
Silvia Massini, University of Manchester
Carine Peeters, Université libre de Bruxelles
Arie Y. Lewin, Duke University
This paper contributes to the discourse on the co-evolution of firm boundaries and capabilities by focusing on
the impact of process commoditization, changing external availability of capabilities and firm specific paths of
governance decisions on the configuration of firm boundaries, and their co-evolution over time. Our analysis
further incorporates the role of firm strategic orientation in decisions to source business services internally
(captive) vs. from third party providers. We test our hypotheses on a unique and comprehensive panel of 930
discrete offshore operations across various business functions and locations from early experiments in the late
1980s through 2011. Our empirical findings suggest that the three mechanisms of process commoditization,
changing availability of service suppliers, firm-level experiences and prior sourcing decisions, along with
strategic orientations, affect choices of governance models for sourcing particular tasks and, hence, the coevolution
of firm boundaries in the context of global services sourcing. Yet, these three mechanisms affect
governance model choices in different ways over time, which can be explained by the interplay of external
dynamics (e.g. growing maturity of sourcing practices and supplier relations across firms) and internal dynamics
(e.g. growing firm-level experience with and development of specific capabilities for global sourcing). (For more
information, please contact: Stephan Manning, University of Massachusetts Boston, USA:
stephan.manning@umb.edu)
Session: 3.4.6 - Competitive
Track: 3 - IB Theory, FDI, and Entry Mode
Spillovers: Here, There, Everywhere
Presented On: July 3, 2012 - 14:30-15:45
Chair: Ulf Andersson, Copenhagen Business School
Inter-regional Determinants of Innovatory Spillovers from Foreign Direct Investment: Evidence from China
Yi (Elizabeth) Wang, University of Leeds
Jeremy Clegg, University of Leeds
Chengqi Wang, Nottingham University Business School
This paper investigates the inter-regional impact of inward foreign direct investment (FDI) on the ability of
domestic Chinese firms to generate their own technologies. Research on FDI spillovers productivity effects
argues that advanced technology employed by foreign-invested firms is adopted by domestically-owned firms,
so raising their productivity. We know far less about the mechanisms through which FDI impacts upon the
innovative capabilities of these domestic firms. We draw upon literatures on the multinational enterprises,
knowledge diffusion (organisational learning), and economic geography to investigate empirically the
relationship between inward FDI and domestic patent innovation (innovatory spillovers), and how and why this
relationship varies spatially. We find that the baseline impact of innovatory spillovers is negative, in contrast
with that generally found for productivity spillovers; patenting by foreign firms within the host economy
perforce generates a near-perfect crowding out effect. We then identify an "inventing around" mechanism,
AIB 2012 Conference Proceedings
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