Abstract: This paper addresses three questions: (i) Are multinational firms (MNCs) really better than markets at transferring knowledge across borders? (ii) How actively do MNCs exchange knowledge with their host countries? (iii) Do they contribute as much to local knowledge as they learn from their host countries? To answer these questions, I analyze data on citations for over half a million patents from 4,400 firms and organizations from six countries, covering all manufacturing sectors. I estimate the probability of individual knowledge flows, as measured using patent citations, through a weighted maximum likelihood estimation approach for choice-based samples. Cross-border knowledge flows within the same MNC are found to be several times stronger than those between different entities even within the same country. Interestingly, these intra-MNC flows are equally strong in both directions between the home base and the foreign subsidiaries. Turning to intra-national knowledge flows, foreign MNC subsidiaries learn more from domestic entities than they contribute to host country knowledge, though this pattern differs across countries and industries. Knowledge flows from host countries to MNCs are in fact as strong as those between domestic entities, showing that MNC subsidiaries are not disadvantaged by their foreign affiliation. Finally, parent firms of MNCs with a higher fraction of innovative activity located abroad also learn more from other countries, suggesting

Abstract. International business activities have confronted entrepreneurs with host business environments that are fundamentally different from their home countries. Despite decades of entrepreneurship research, we know very little about these entrepreneurs and their strategic behaviour in establishing and managing transnational operations. This paper develops an institutional perspective on transnational entrepreneurship. This perspective argues that significant variations in institutional structures of home countries explain variations in the entrepreneurial endowments of prospective transnational entrepreneurs. Transnational entrepreneurship is embedded in transnational actor networks that facilitate successful cross-border business operations. This paper goes beyond the theoretical impasse in entrepreneurship and international business studies.

This dissertation investigates the factors that influence the learning of subsidiaries from their local environment and the sequential knowledge outflow from the subsidiaries. Scholars have recognized the ability to learn from diverse local environments as a critical source of competitive advantage for multinational corporations (MNCs). However, the factors influencing the extent to which MNCs learn from local environments in order to develop innovative capabilities have not been well understood. Considering the complexity of institutional environments faced by subsidiaries, this dissertation explores cross-level factors that influence subsidiary learning from diverse local environments. At interface levels, a subsidiary’s local embeddedness and its learning strategy influence the awareness of local strategic knowledge by the subsidiary. At context levels, local market competition and corporate entrepreneurial culture affect the motivation of a subsidiary to learn from diverse local environments. Finally at subsidiary level, top management team heterogeneity impacts the capability of a subsidiary to learn. This dissertation applies both qualitative and quantitative research methods. Multiplecase studies provide rich details, while survey research tests the generalizability of the proposed

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The paper addresses reverse knowledge transfer (RKT) from foreign subsidiary to parent company. Specifically, it aims at investigating to what extent the effectiveness of such a transfer is influenced by: (i) the organizational mechanisms employed for transferring knowledge; (ii) the subsidiary’s role, its autonomy, and its relationships with the local context. The empirical analysis considers 162 transfers of best practices possessed by foreign subsidiaries and transferred back to their Italian parent companies. Results confirm that the impact of RKT on the parent company’s innovativeness is greater when: (i) person-based mechanisms are employed for transferring knowledge; (ii) subsidiaries are competence-creating; and (iii) knowledge developed by subsidiaries benefits from local external linkages. Key words: External linkages, organizational mechanisms, parent company’s innovativeness, reverse knowledge transfer, subsidiary’s characteristics.

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The role of multinational corporations (MNCs) in the global economy is enormous. “Few sectors of the economy and few firms are free from its pervasive influence ” (Bartlett and Ghoshal, 1995, p.4). Through their network of subsidiaries, MNCs by operating in an international rather than a domestic arena, can explore many new opportunities. With these

Many potential benefits of foreign expansion have been identified in the literature, yet empirical support that multinational firms perform better than domestic firms is mixed. This paper takes a longitudinal perspective and argues that how much a firm benefits from having foreign subsidiaries depends on its process of internationalization. We argue that a firm´s capacity to absorb expansion is subject to constraints: some expansion patterns increase profitability less than others, owing to diseconomies of time-compression. We hypothesize that the speed of internationalization, the spread of the geographical and product markets entered, and the irregularity of the expansion pattern negatively moderate a firm’s increase in profitability resulting from international expansion. Model estimations based on panel data raised strong support for these predictions. 2

This paper is work in progress and I am thankful for any comments and suggestions regarding it. Errors and omissions might remain in the paper and the intention is not to implicate any of them to the many scholars that have moved the field forward. Please do not quote without prior permission from the author. This paper examines how managers create and develop strategy in practice. It reports findings of an in-depth investigation of managerial activities and associated learning dynamics in strategy creation, the generation and development of radically new strategies. Managerial and learning activities on different organizational levels, their influence on strategy development, and relationship to strategic change are examined. A dual longitudinal case methodology, including a single in-depth case study combined with a multiple retrospective case study is used, involving four multinational companies. The findings show a twofold character of strategy creation including an adaptive and a creative strategy motor of strategic change involving fundamentally different learning dynamics, reflecting their diverse location and social embeddedness. Adaptive learning dynamics were based on exploitation and refinement of prevailing industry and resource structures and involved a deductive reasoning or sensemaking as regards strategy, including knowledge assimilation activities such as formal intelligence and routine experiences. Creative learning dynamics evolved in the periphery of the organizations and were more remote from existing values and beliefs. They predominantly involved exploration and inductive sensemaking, including activities like informal noticing and creative experiments. The exploration/exploitation trade off interaction between the two strategy motors resulted in tension, which finally triggered strategic change.

relationships within a subsidiary network context: