AIB 2012 Conference Proceedings - Academy of International ...

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automobile parts and components manufacturers in China during 2005-2007 supports the above argument. In
order to compete in overseas markets, Chinese automobile parts and components manufacturers' tendency to
invest in R&D initially increased as their export intensity is relatively low. When the export intensity exceeds a
threshold, exporters acquire more advanced knowledge from their foreign customers, reducing their tendency
to invest in R&D. When the exporters have foreign parents or the FDI intensity in the local industry is high, their
tendency to invest in R&D stimulated by export is further reduced. Better intellectual property protection helps
increase the likelihood of in-house R&D stimulated by export. (For more information, please contact: Zhenzhen
Xie, Hong Kong University of Science and Technology, Hong Kong, SAR-PRC: xiezz@ust.hk)
Sectoral Heterogeneity, Inward FDI, and Location Decisions in Sub-national Regions of a Host Country
In Hyeock Lee, Western Kentucky University
Shige Makino, Chinese University of Hong Kong
Eunsuk Hong, SOAS, University of London
Built on the differences between service and manufacturing sectors, this study examines the general proposition
that service and manufacturing MNEs have different motives for conducting FDI, and that these differences
influence their final locations in the sub-national regions of a host country. Using a full population of inward FDI
projects conducted by manufacturing and service MNEs across 234 sub-national regions in Korea between 2000
and 2004, this study finds evidence to support the proposition. In addition, it shows non-linear industry and
home country effects between the manufacturing and service MNEs' location decisions and certain locationspecific
advantages in the sub-national regions. (For more information, please contact: Eunsuk Hong, SOAS,
University of London, United Kingdom: e.hong@soas.ac.uk)
Session: 1.3.6 - Competitive
Track: 5 - MNC Management and Organization
Search Processes and Decision Making in International Business
Presented On: July 1, 2012 - 13:00-14:15
Chair: Andreas Schotter, Thunderbird School of Global Management
Subsidiary 'Non-Localized Search' and MNC Performance: The Role of Subsidiary Intra-Firm Knowledge Outflows
Feng Zhang, St. Mary's University
Guohua Jiang, Temple University
John Cantwell, Rutgers University
While previous literature focused on firm-level new product introduction rate that is brought by firm-level nonlocalized
search, this measure may not be able to generate in-depth insights of the effects of non-localized
search on multinational corporations (MNCs) because of their geographically dispersed organizational structure.
We argue that for large MNCs the pattern of intra-firm knowledge flows would offer further insights into the
effects of geographically dispersed non-localized search on the MNC as a whole. By differentiating intra-firm
knowledge outflows from a subsidiary to the headquarters (namely vertical outflows) and those to peer
subsidiaries (namely horizontal outflows), we are able to show one of the mechanisms, through which the MNC
with its spatial organizational structure could enjoy the benefits of non-localized search at a subsidiary-level.
This study bridges organizational learning literature and MNC literature, and the findings have implications on
knowledge management strategies of the MNC. (For more information, please contact: Feng Zhang, St. Mary's
University, USA: fzhang@stmarytx.edu)
AIB 2012 Conference Proceedings
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