Subsidiary-specific advantages in multinational enterprises

Authors

  • Alan M. Rugman,

    Corresponding author
    1. Templeton College, University of Oxford, Oxford, U.K., and Kelley School of Business, Indiana University, Bloomington, Indiana, U.S.A.
    • Templeton College, University of Oxford, Oxford OX1 5NY, U.K
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  • Alain Verbeke

    1. Solvay Business School, University of Brussels (V.U.B.), Brussels, Belgium, and Templeton College, University of Oxford, Oxford, U.K.
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Abstract

This paper discusses the internal patterns of competence building in the multinational enterprise (MNE), with a focus on the creation of capabilities in its foreign subsidiaries. We present a new framework to synthesize 10 types of MNE–subsidiary linkages leading to capability development. We find that several of the 10 capability development processes are associated with subsidiary-specific advantages. We discuss the process of subsidiary-specific advantage development within the organizational structure of the MNE when it is a differentiated network of dispersed operations. Copyright © 2001 John Wiley & Sons, Ltd.

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