AIB 2012 Conference Proceedings - Academy of International ...

SUNDAY
Technology Sourcing and a 'Creative Transition' in Subsidiaries: The Case of MNE Operations in China
Marina Papanastassiou, Copenhagen Business School
Robert Pearce, University of Reading
Si Zhang, Tsinghua University
The paper focuses on a ‘creative transition' (CT) as a crucial tipping point in the strategic evolution of MNE
subsidiaries. Before a CT a subsidiary's operations will be based around application (in a market-seeking or
efficiency-seeking strategy) of the successful established technologies and products of the MNE group. After
the CT (as, for example, a Product Mandate) the subsidiary will be deriving new sources of technology, notably
from its host country, and developing new products from these. Thus, we argue, the sources of technology
accessed and/or generated by a subsidiary are crucial in defining its competitive status. Evidence cited from a
study of MNE subsidiaries in China demonstrates the value of the concept of CT. Though pre-CT operations of
an ES, export-oriented, nature have played a role in China it is shown that, to an increasing degree, it is now
post-CT innovation that provides the dominant imperative. But, contrary to traditional Product Mandates, a
major strand of this innovation targets an embedded position in China's growth for MNEs. (For more
information, please contact: Marina Papanastassiou, Copenhagen Business School, Denmark: mpa.smg@cbs.dk)
Session: 1.5.12 - Interactive
Track: 8 - Developing Country MNCs
Competitive Dynamics and Developing Economy Multinationals
Presented On: July 1, 2012 - 16:15-17:30
Chair: Luis Alfonso Dau, Northeastern University
The Internationalization of Private and State Firms under Reforms
Luis Alfonso Dau, Northeastern University
Building on the institution-based view of strategy, we study the impact of pro-market reforms on developingcountry
firm multinationality. We propose that reforms increase multinationality by reducing institutional
imperfections and increasing domestic competition, thus inducing firms to expand internationally. However, we
argue that the effect is higher for private firms than state firms because the former are compelled to be more
responsive to institutional changes and opportunities in order to survive. The three-level RCM Poisson analyses
of a panel of the largest firms in Latin America for the period 1989-2009 provide robust support for the
arguments. (For more information, please contact: Luis Alfonso Dau, Northeastern University, USA:
l.dau@neu.edu)
Innovation Blowback - How Competition between Advanced Economy MNEs Raises Competitors from Emerging
Markets
Martin Ihrig, University of Pennsylvania
Philip Kappen, Uppsala University
This paper provides an evolutionary explanation to the rise of the emerging market MNE. It does so by
presenting the innovation blowback framework which describes how competition between traditional advanced
economy MNEs raises tomorrow's new competitors from emerging markets. In particular, the paper provides a
formal model of trade-offs that the advanced economy MNE faces when organizing its R&D activities either
concentrated at home or geographically dispersed. Using the SimIntReDe software, the model is subsequently
evaluated by simulation in the SimISpace environment. The initial simulations lend support for the innovation
blowback framework and the findings provide insights into the evolution of new competition, firm performance
AIB 2012 Conference Proceedings
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