Ivo Zander, Uppsala University

2010-2015

The main purpose of the research project has been to investigate how foreign subsidiaries have contributed to the technological and strategic renewal of the multinational corporation (MNC). The empirical material consists of a unique and over the course of the project updated database, which includes a sample of the largest Swedish MNCs and their patenting activities over the 1890-2008 period.

Seen from a different perspective, the project has addressed what has developed into a set of almost axiomatic statements about the attributes of the modern MNC, including the assumptions that during recent years foreign units have become a significant source of technological and strategic renewal of the MNC, that the difference between technological contributions from headquarter and foreign units has diminished over time, and that substantial amounts of knowledge and technology flow rapidly across geographically dispersed units of the MNC network.

MAIN FINDINGS

The results may be summarized in a number of points, which essentially reflect the findings from the various publications generated by the project: (1) There is a significant difference in the technological contribution from greenfield and acquired subsidiaries (acquired units are more likely to introduce the multinational group to new fields of technology), (2) only a small number of 'superstar subsidiaries' make a more substantial contribution to the technological renewal of the multinational group, (3) within these 'superstar subsidiaries', only a small number of researchers account for the majority of all technological advancements, (4) significant differences remain with regard to the diffusion of technological capabilities across different units of the MNC network, (5) the conditions surrounding the creation of technologically advanced foreign subsidiaries have a significant and long-lasting impact on their degree of technological adventurousness (an imprinting effect) , and (6) the emergence of the modern MNC is accompanied by substantial inter-firm variation as well as remaining differences in the degrees to which technological capabilities are allowed to diffuse across headquarters and greenfield and acquired units.

NEW RESEARCH QUESTIONS GENERATED BY THE PROJECT

For the shorter term, the project has generated ideas for two papers, both of which will be developed over the coming year. The first paper builds on evolutionary theory to look at the combination of imprinting effects when foreign subsidiaries develop into technologically more advanced units (the paper 'The adventurous gene') and the time-varying effects of headquarter technological activities. Preliminary analyses suggest that apart from imprinting effects the multinational network moves in synchronized ways or 'waves' when it comes to home and foreign technological activities. The implications are interesting for the theory of the MNC, but also for the management of technology in the geographically dispersed organization.

The second paper has more of a practical orientation, and it responds to an invitation to summarize the research findings in an article for Harvard Business Review. This paper will critically assess the 'received view' of the modern MNC, to instead highlight the remaining specialization and slow-moving changes that seem to characterize many of the well-established MNCs.

Patenting data have proven a most useful source of information for longitudinal and comparative analyses of the technological, strategic, and organizational development of MNCs. A future research project intends to expand the scope of the existing database and explore how significant events impact the technological profile of MNCs. These specific events include major international mergers and acquisitions, economic crises, and the entry of new global competitors with origins in for example China, India, and Brazil.

INTERNATIONAL CONTACTS AND CONNECTIONS

Apart from participation at the major international business conferences and publications in well-reputed refereed journals, the project has strengthened and extended international research contacts. One current and one future paper are co-authored with Professor John Cantwell at Rutgers University. During the coming year the research group at Uppsala University will be expanded to include guest researcher Dr. Seiko Arai from Leeds University, whose research has focused particularly on innovation in Japanese MNCs.

EXTERNAL CONTACTS BEYOND ACADEME

Invited talks on the project topics and findings, attended by a mix of academics, practitioners, and policy-makers, include: (1) 'New perspectives of the internationalisation of innovation: The changing role of MNCs' (Institute of Research on Innovation, IREIN, Universidad Complutense de Madrid, Spain, April 23, 2015), (2) 'Innovation and strategic renewal of the multinational corporation' (Guangdong University of Finance and Economics, China, January 7, 2014), and (3) 'Superstar subsidiaries and innovation in multinational companies', (Séminaire Management de l'Innovation - Théories et Pratiques, Ecole des Mines de Paris, France, June 12, 2014).

THE PROJECT'S TWO MOST IMPORTANT PUBLICATIONS

It is somewhat difficult to single out the project's two most important publications. For this assessment the research group has primarily considered the significance of the theoretical and conceptual contributions.

One of the two papers, entitled 'Superstar inventors - Towards a people-centric perspective on technological renewal in foreign subsidiaries of the multinational corporation', was published in Research Policy. The article documents a significant degree of skewness in the technological contributions among foreign subsidiaries of the MNC, but also a similar skewness in the technological contributions made by individual researchers within these foreign units. Two conclusions are particularly important for international business research: (1) While much of the existing literature on innovation and competitiveness of the MNC has focused on headquarter-subsidiary relationships, a large part of the explanation for technological renewal and upgrading of competitive advantage can be found at the level of individuals, and (2) a large part of the literature on local embeddedness has looked at business relationships at the firm or unit level, whereas instead a limited number of personal networks seem to be of critical importance for the MNC's technological and strategic renewal.

The second paper was 'discovered' over the course of the research project, combining intuitive insight with a fair amount of risk taking in the form of extensive complementary data collection. The paper is entitled 'The adventurous gene - Technological imprinting in the international growth of the multinational corporation', and is aimed at the leading journals in the field of business studies. The basic idea is simple and also confirmed by the empirical analyses: the degree of technological adventurousness of foreign subsidiaries is decided by the brief imprinting period that surrounds their entry into the category of advanced technological units. This paper identifies a new process and determining factor for the technological activities carried out by foreign subsidiaries, where extant theories instead of short-term influences with long-term effects have emphasized how foreign subsidiaries evolve gradually over time.

PUBLICATION STRATEGY

The publication strategy has been conventional and with a focus on well-reputed refereed journals, especially in the field of international business.

DISSEMINATION OF RESEARCH FINDINGS

To secure the dissemination of the research findings all articles and papers are and will be published in the DIVA database at Uppsala University. These will be the pre-publication versions of the ultimately published articles, identical in terms of content but without the final editing and layout. In one case ('Superstar inventors'), an open-access fee was paid to make the article generally available from Research Policy. This open-access publication is part of the research group's ambitions to learn more about the effects of offering finished articles in open-access format.

Apart from publications, the project findings have been presented at a number of the major international research conferences (Academy of Management, Academy of International Business, European International Business Academy). At the Academy of International Business meetings, two papers were nominated for 'The Aalto University School of Economics "That's Interesting!" Award', which targets papers characterized by a significant degree of theoretical or empirical innovativeness.

As mentioned above, the project findings have been presented at several invited guest talks. They have also been integrated into the educational programs at Uppsala University, partly within the master specialization of entrepreneurship (within a module that addresses intrapreneurship in the multinational corporation), partly within an international PhD program in international business (NORD-IB).

The research team would like to thank to Riksbankens Jubileumsfond for its confidence in the project and generous financial support.

Publications

Articles published in refereed journals or edited volumes:

Blomkvist, K., Kappen, P. & Zander, I. (2014) Superstar inventors – Towards a people-centric perspective on technological renewal in foreign subsidiaries of the multinational corporation. Research Policy, 43 (4): 669-682.

Blomkvist, K., Kappen, P. & Zander, I. (2014) Win, place, or show? How foreign market entry strategies contribute to the technological growth of the multinational corporation. Long Range Planning, 47 (1-2): 16-31.

Blomkvist, K., Kappen, P. & Zander, I. (2012) Superstar subsidiaries of the multinational corporation: In search of origins and drivers. In: M. Andersson, C. Karlsson, B. Johansson & H. Lööf (Eds), Innovation and growth: From R&D strategies of innovating firms to economy-wide technological change: 57-87. Oxford: Oxford University Press.

Papers under review by refereed journals:

Blomkvist, K. & Kappen, P. (2015) Birds of a feather flock together: Technological integration of foreign subsidiaries of the multinational corporation. Revise and re-submit at Industrial and Corporate Change.

Blomkvist, K., Kappen, P. & Zander, I. (2015) Gone are the creatures of yesteryear? On the diffusion of technological capabilities in the modern MNC. Under first review by Journal of World Business.

Papers under preparation for journal submissions: 

Blomkvist, K., Cantwell, J., Kappen, P. & Zander, I. (2015) The adventurous gene – Technological imprinting in the international growth of the multinational corporation. Paper to be submitted to Academy of Management Journal.

Conference papers:

Blomkvist, K., Kappen, P. & Zander, I. (2015) Animal farm – On the diffusion of technological capabilities and the theory of the MNC. Paper submitted to the Academy of International Business Annual Meeting, 2015.

Blomkvist, K., Cantwell, J., Kappen, P. & Zander, I. (2013) The adventurous gene – Technological imprinting in the international growth of the multinational corporation. Paper presented at the European International Business Academy Meeting, December 12-14, Bremen, and at the Academy of International Business Annual Meeting, June 23-26, Vancouver.

Nominated for The Aalto University School of Economics “That’s Interesting!” Award, Academy of International Business Annual Meeting.

Blomkvist, K., Kappen, P. & Zander, I. (2012) Gone are the creatures of yesteryear? On the diffusion of technological capabilities in the modern MNC. Paper presented at the European International Business Academy Meeting, December 6-9, Sussex.

Blomkvist, K., Kappen, P. & Zander, I. (2012) Win, place, or show? How foreign market entry strategies contribute to the technological growth of the multinational corporation. Paper presented at the Long Range Planning workshop, May 25-26, University of Reading.

Blomkvist, K., Kappen, P. & Zander, I. (2012) Superstar inventors in foreign subsidiaries of the MNC. Paper presented at the Academy of International Business Annual Meeting, June 30-July 3, Washington, DC, and at the Academy of Management Annual Meeting, August 3-7, Boston.

Nominated for The Aalto University School of Economics “That’s Interesting!” Award, Academy of International Business Annual Meeting.

Blomkvist, K., Kappen, P. & Zander, I. (2011) Superstar subsidiaries of the MNC: In search of origins and underlying drivers. Paper presented at the Academy of International Business Annual Meeting, June 25-29, Rio de Janeiro.

Other publications:

Blomkvist, K. (2013) Superstar subsidiaries: Not all subsidiaries are created equal. Mercury, 3: 60-62.

Thorn, K., & Ceciliano, R. (2014) The loss of mandates: A study on the loss of mandates by exploring theory and using Astra Zeneca as an empirical case. Master thesis, Department of Business Studies, Uppsala University.