TY - JOUR
T1 - Balancing the Trade-off Between Learning Prospects and Spillover Risks
T2 - MNC Subsidiaries' Vertical Linkage Patterns in Developed Countries
AU - Perri, Alessandra
AU - Andersson, Ulf
AU - Nell, Phillip Christopher
AU - Santangelo, Grazia D.
PY - 2013/10
Y1 - 2013/10
N2 - This paper investigates local vertical linkages of foreign subsidiaries and the dual role of such linkages as conduits for learning as well as potential channels for spillovers to competitors. On the basis of data from 97 subsidiaries, we analyze the quality of such linkages under varying levels of competition and subsidiary capabilities. Our theoretical development and the results from the analysis document a far more complex and dynamic relationship between levels of competition and MNCs’ local participation in knowledge intensive activities, i.e. learning and spillovers, than previous studies do. We find a curvilinear relationship between the extent of competitive pressure and the quality of local linkages confirming our argument of a trade-off between learning prospects and spillover risks. Furthermore, the level of subsidiary capabilities moderates this relationship.
AB - This paper investigates local vertical linkages of foreign subsidiaries and the dual role of such linkages as conduits for learning as well as potential channels for spillovers to competitors. On the basis of data from 97 subsidiaries, we analyze the quality of such linkages under varying levels of competition and subsidiary capabilities. Our theoretical development and the results from the analysis document a far more complex and dynamic relationship between levels of competition and MNCs’ local participation in knowledge intensive activities, i.e. learning and spillovers, than previous studies do. We find a curvilinear relationship between the extent of competitive pressure and the quality of local linkages confirming our argument of a trade-off between learning prospects and spillover risks. Furthermore, the level of subsidiary capabilities moderates this relationship.
KW - Competitive pressure
KW - Learning
KW - Quality of local vertical linkages
KW - spill overs
KW - subsidiary capabilities
U2 - 10.1016/j.jwb.2012.09.006
DO - 10.1016/j.jwb.2012.09.006
M3 - Journal article
SN - 1090-9516
VL - 48
SP - 503
EP - 514
JO - Journal of World Business
JF - Journal of World Business
IS - 4
ER -