How the parent–subsidiary relationship encourages subsidiary-driven innovation and performance in Korea: the perspective of subsidiary autonomy

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Abstract

From the perspective of subsidiary autonomy, this study addresses what affects subsidiary-driven innovation in multinational corporations (MNCs). This study examines this question from three dimensions: (1) top management team (TMT) leadership, (2) knowledge links and (3) organizational size. Our model is tested using a sample of 250 MNC subsidiaries located in Korea. We found that non-expatriate or entrepreneurship-oriented TMT leadership generally enhances subsidiary-driven innovation. We also found that the level of networking with local knowledge sources is associated positively with subsidiary-driven innovation. In addition, the relative size of the subsidiary shows an inverted U-shaped relationship with subsidiary-driven innovation. Finally, the relationship between subsidiary-driven innovation and subsidiary performance is positively moderated by environmental dynamism. The results suggest that as foreign subsidiaries gain autonomy, the likelihood of subsidiary-driven innovation increases.

Original languageEnglish
Pages (from-to)1-23
Number of pages23
JournalAsian Journal of Technology Innovation
Volume26
Issue number1
DOIs
Publication statusPublished - 2018 Jan 2

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Innovation
Subsidiary autonomy
Korea
Subsidiaries
Industry

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Management of Technology and Innovation

Cite this

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