Proceedings - Academy of International Business - Michigan State ...

Institutional Effects on MNC Learning Behavior: A Look at the European Chemical IndustryAyse Saka, University of Groningen, a.saka@eco.rug.nlSUNDAY PROGRAMThis study presents a multi-level comparative approach to investigating the extent to which multinational corporations(MNCs) in their relationship with their affiliate firms engage in single- and double-loop learning with implications fororganisational performance. The focus is on the impact of institutional and organisational variation on the intensity oforganisational learning. Neo-institutional and multinational corporation perspectives are furthered in the study by linkingenvironmental adaptation to intentional action in which adaptation is implicated. It is argued that learning within MNCsoccurs in a context of translating existing behavioural and cognitive templates. The research, which is ongoing at present,is based on in-depth case studies that are aimed at systematically comparing the ways in which i) parent company templatesdiffuse to Polish, Turkish, Italian and German affiliate firms and ii) affiliate company templates diffuse to German andBritish parent companies in the chemical industry. The study contributes to arguments on the diversity of institutionalsystems or in cross-national patterns in the midst of globalisation, where multinational diversity provides alternativeopportunities for learning and capability building. It is argued that an MNC is likely to engage in double-loop learning uponincreased international diversity and acquisitions in developed countries. The difference in the levels of economicadvancement between home and host environments tends to encourage incremental adaptation or single-loop learning.Knowledge-seeking foreign investment, clustering and retained earningsSarianna M. Lundan, University of Maastricht, S.Lundan@mw.unimaas.nlThis paper explores the consequences of the internationalization of corporate research and development (R&D) on thelocational patterns of innovative activity, and the role foreign investment plays in the financing of such activity. Althoughthe number of research-intensive small firms continues to grow, both in terms of output as measured by patent citations aswell as input as measured by R & D expenditures, large firms claim the lion's share of innovative activity in many sectors.At the same time, the key aspect of the transformation of the multinational firm over the past decade has been the changingof focus away from the exploitation of home-based capabilities towards the establishment of corporate networks aimed notonly at the diffusion, but also at the exploitation of disparate knowledge-based resources. We present aggregate evidence onthe patters of innovative activity within Europe, paying particular attention to the clustering of American direct investmentin European R&D activities. We contrast these patterns with the levels of retained earnings as a source of investment, andfind that at least in terms of magnitude, retained earnings offer sufficient funding for American R&D activities in Europe.We discuss the implications of this finding in terms of investment retention and the sustained growth of innovative clusters.Collaborate or Do It Alone? Trade of Strategic Resources, Interorganizational Embeddedness, and Value CreationHengchiang Huang, National Taiwan University, bhchuang@mba.ntu.edu.twHsin-Mei Lin, National Taiwan University, lin1117@mba.ntu.edu.twWe try to explain the interorganizational collaboration and their success of value creation (related to time-to-market andcost benefit in innovation) by adopting the concept of network embeddedness and IORs that influence the exchange modeof strategic resources combining and exchanging under the resource-based obstructs like information asymmetry, resourcesinimitability, and resources immobility. We identify the antecedents of transaction difficulties in interfirm complementarystrategic resources combine and exchange from perspectives of resources-based view, which lead to a more hierarchicalmode of exchange in logic of TCE. Furthermore, the importance of role of relational embeddedness in moderating theinformation problem, the role of structural embeddedness in offering informal safeguarding mechanism to lessencoordination difficulty, and the role of positional embeddedness in strengthening the benefits of the other kinds ofembeddedness is elucidated to explain the prevalence of using interorganizational collaboration rather than M&A (do italone) on acquiring complementary strategic resources for value creation in innovation under the situation that transactioncost is high. We offered a supplemental role of interorganizational embeddedness on facilitating value creation throughinterfirm collaboration on resources exchange and combination when transaction cost theories and resources-based view areconcerned in the exchange process and modes.AIB 2003 - Monterey, California, USA July 5-8, 2003 37