Chapter 4: Heterogeneity Across and Within Multinational Firms
4. Heterogeneity across and within multinational ﬁrms 4.1 INTRODUCTION In Chapter 3, we highlighted that MNFs diﬀer from exporters and from uni-national ﬁrms in terms of economic and innovative performances. Moreover, we introduced a distinction across multinationals. In fact we separated ﬁrms controlling production activities abroad from ﬁrms controlling non-production facilities only, and showed that this distinction is also associated with some diversity in performance. In this chapter we shall focus on other aspects of heterogeneity across multinationals and introduce a further dimension, that is, diversity within multinationals. To address the issue of heterogeneity across multinationals, we shall use a metaphor introduced in Part I of this volume: each MNF acts as a distinct bridging institution, connecting in a speciﬁc way diﬀerent economic and innovation systems (of origin and of destination). By so doing, each multinational company absorbs and utilises diﬀerent sets of capabilities and of innovative opportunities, and combines its own knowledge base with the external assets to which it has access abroad. From this perspective, constraints and opportunities that MNFs meet in their (national, regional or sectoral) systems of origin and destination, as well as the intensity and geographic spread of the connections they are able to create with diﬀerent systems are fundamental sources of heterogeneity. In fact, through their speciﬁc (internal and external) networking strategies, multinationals are able to build up their competitive strengths and to diﬀerentiate their economic and innovative performances. The second key aspect of heterogeneity we shall...
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