The Driving Forces of Subsidiary Absorptive Capacity

Stephanie C. Schleimer, Torben Pedersen

    Research output: Contribution to journalJournal articleResearchpeer-review


    The study investigates how a multinational corporation (MNC) can promote the absorptive capacity of its subsidiaries. The focus is on what drives the MNC subsidiary's ability to absorb marketing strategies that are initiated by the MNC parent, as well as how the subsidiary enacts on this absorptive capacity in order to compete in its focal market. The dual embeddedness of MNC subsidiaries plays a key role in this investigation, as subsidiaries belong to the MNC network and are simultaneously embedded in their host country environment. We argue that subsidiary absorptive capacity is formed as a purposeful response to this dual embeddedness. An analysis of marketing strategy absorptions undertaken by 213 subsidiaries reveals that MNCs can assist their subsidiaries to compete in competitive and dynamic focal markets by forming specific organizational mechanisms that are conducive to the development of subsidiary absorptive capacity. The findings hold important theoretical and practical implications.
    Original languageEnglish
    JournalJournal of Management Studies
    Issue number4
    Pages (from-to)646-672
    Publication statusPublished - Jun 2013

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