University of Oulu

Gölgeci, I., Ferraris, A., Arslan, A., & Tarba, S. Y. (2019). European MNE subsidiaries’ embeddedness and innovation performance: Moderating role of external search depth and breadth. Journal of Business Research, 102, 97–108.

European MNE subsidiaries’ embeddedness and innovation performance : moderating role of external search depth and breadth

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Author: Gölgeci, Ismail1; Ferraris, Alberto2,3; Arslan, Ahmad4;
Organizations: 1School of Business and Social Sciences, Department of Business Development and Technology, Aarhus University, Denmark
2Department of Management, School of Management & Economics, University of Turin, Italy
3Research Fellow of the Laboratory for International and Regional Economics, Graduate School of Economics and Management, Ural Federal University, Russia
4Department of Marketing, Management and International Business, Oulu Business School, University of Oulu, Finland
5Department of Strategy & International Business, Birmingham Business School, University of Birmingham, United Kingdom
Format: article
Version: accepted version
Access: open
Online Access: PDF Full Text (PDF, 1.4 MB)
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Language: English
Published: Elsevier, 2019
Publish Date: 2022-05-23


While much research has been conducted on the link between embeddedness and innovation outcomes, less attention has been paid on how and when MNE subsidiaries can effectively leverage their internal embeddedness to achieve greater innovation performance. We hypothesize knowledge transfer as a mediating mechanism to channel the potential role of MNE subsidiaries’ internal embeddedness in innovation performance. Moreover, we explore the moderating influences of external search depth and breadth on subsidiaries’ internal knowledge transfer and innovation performance. To test our framework, we rely on primary data collected from 91 subsidiaries of eleven European MNEs. The results show the degree of knowledge transfer from other MNE units mediates the link between subsidiaries’ internal embeddedness and their innovation performance. We also find that external search depth positively moderates the link between the degree of knowledge transfer and subsidiary’s innovation performance, while external search breadth does not. We illustrate that knowledge transfer mechanisms and the moderating role of external search approaches can be instrumental in channeling and effectively realizing the role of subsidiary internal embeddedness in innovation performance.

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Series: Journal of business research
ISSN: 0148-2963
ISSN-E: 1873-7978
ISSN-L: 0148-2963
Volume: 102
Pages: 97 - 108
DOI: 10.1016/j.jbusres.2019.05.011
Type of Publication: A1 Journal article – refereed
Field of Science: 512 Business and management
Copyright information: © 2019 Elsevier Inc. All rights reserved. © 2018. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http:/