Template-type: ReDIF-Paper 1.0
Author-Name: Narula, Rajneesh
Author-Email: r.narula@henley.ac.uk
Author-Workplace-Name: John H. Dunning Centre for International Business, Henley
	 Business School, University of Reading
Title: Exploring the paradox of competence-creating subsidiaries: balancing bandwidth 
	 and dispersion in MNEs 
Abstract: This paper seeks to synthesise the various contributions to the special 
	 issue of Long Range Planningon competence-creating subsidiaries (CCS), 
	 and identifies avenues for future research. Effective 
	 competence-creation through a network of subsidiaries requires an 
	 appropriate balance between internal and external embeddedness. There 
	 are multiple types of firm-specific advantages (FSAs) essential to 
	 achieve this. In addition, wide-bandwidth pathways are needed with 
	 collaborators, suppliers, customers as well as internally within the 
	 MNE. Paradoxically, there is a natural tendency for bandwidth to shrink 
	 as dispersion increases. As distances (technological, organisational, 
	 and physical) become greater, there may be decreasing returns to MNE 
	 spread. Greater resources for knowledge integration and coordination are 
	 needed as intra- and inter-firm R&D cooperation becomes more intensive 
	 and extensive. MNEs need to invest in mechanisms to promote 
	 wide-bandwidth knowledge flows, without which widely dispersed and 
	 networked MNEs can suffer from internal market failures.
Classification-JEL: F23, Z13, M21
Keywords: R&D, globalization, dispersion, embeddedness, knowledge flows
Series: UNU-MERIT Working Papers
Creation-Date: 2013
Number: 046
File-URL: http://www.merit.unu.edu/publications/wppdf/2013/wp2013-046.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2013046