Multinational Firms, Innovation and Productivity
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Multinational Firms, Innovation and Productivity

Davide Castellani and Antonello Zanfei

This book gets to the root of how and why multinational firms differ in the cross-border creation, transfer and diffusion of technology, and provides fresh evidence on the effects that these differences have on productivity and innovation in the economic systems in which they are active.
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Chapter 2: The Double Network Structure of Multinational Firms: A Review of the Evidence

Davide Castellani and Antonello Zanfei


2. The double network structure of multinational firms: a review of the evidence 2.1 INTRODUCTION In Chapter 1 we suggested that traditional asset exploiting strategies increasingly co-exist with asset seeking activities, through which multinationals gain access to knowledge sources in foreign locations. We also argued that this growing importance of knowledge sourcing abroad goes hand in hand with changes in the organisation of innovative activities, towards what we identified as a double network structure. In this chapter we shall review the evidence which can be considered consistent with this evolutionary process. In section 2.2 we draw on the rather scattered evidence concerning the different aspects of the double network structure: the international dispersion of innovative activities, the degree of autonomy of subsidiaries, the extent to which subsidiaries are embedded in host economies and involved in collaborative ventures with local firms, and intra-firm knowledge flows. In section 2.3 we illustrate evidence on the complementarity between internal and external networks. In section 2.4 this complementarity will be examined with reference to the electronics and chemical industries. Section 2.5 concludes. 2.2 EVIDENCE ON THE DOUBLE NETWORK ORGANISATION OF INNOVATIVE ACTIVITIES As discussed in Chapter 1, to the extent that asset seeking strategies are deployed, MNFs are likely to resort to what we defined as a double network structure. Some of the scattered evidence produced in different studies using a variety of methodologies can be considered at least consistent with this idea. First, the extensive literature on international R...

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