MNE competence-creating subsidiary mandates
Article first published online: 25 OCT 2005
Copyright © 2005 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 26, Issue 12, pages 1109–1128, December 2005
How to Cite
Cantwell, J. and Mudambi, R. (2005), MNE competence-creating subsidiary mandates. Strat. Mgmt. J., 26: 1109–1128. doi: 10.1002/smj.497
- Issue published online: 25 OCT 2005
- Article first published online: 25 OCT 2005
- Manuscript Revised: 23 MAY 2005
- Manuscript Received: 30 JUL 2001
- subsidiary entrepreneurship;
The determinants of R&D intensity differ between subsidiaries in a multinational enterprise (MNE). Previous literature suggests that whether a subsidiary achieves a competence-creating output mandate depends on the qualities of its location. R&D strategies in competence-creating subsidiaries are supply-driven while those in purely competence-exploiting subsidiaries are demand-driven. Using data on U.K. subsidiaries of non-U.K. MNEs, we find that the level of subsidiary R&D depends on MNE group-level and subsidiary-level characteristics as well as locational factors. The R&D of mandated subsidiaries rises with acquisition, but for non-mandated subsidiaries R&D falls upon acquisition. MNEs that grow through acquisition have more inter-subsidiary R&D diversity. Copyright © 2005 John Wiley & Sons, Ltd.