Innovation and Creativity
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Innovation and Creativity

Pillars of the Future Global Economy

Edited by Filip De Beule and Ysabel Nauwelaerts

This book brings together different insights into the importance of innovation and creativity to build competitiveness in the European industry and society from different angles.
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Chapter 10: Innovation initiative within foreign subsidiaries in South Korea: determinants and outcomes

Axèle Giroud, Yoo Jung Ha and Mo Yamin


Innovation is the process through which new products or processes are introduced within the firm; it represents the end of a process of knowledge sourcing and transformation, as well as the beginning of a process of exploitation which may result in an improvement in the performance of the innovating firm (Roper and Love, 2008). Within the context of the multinational corporation (MNC), localized subsidiary innovation (innovation initiative) refers to the extent to which subsidiaries develop and adopt new products, processes or administrative systems locally (Mu et al., 2007; Ghoshal and Bartlett, 1988). The perspectives of organizational learning and knowledge (Cohen and Levinthal, 1990), and inter-firm networks (Forsgren, 2008) explain how subsidiaries have a local network of relationships that provides access to local knowledge. Authors have emphasized the importance of local resources for MNE innovation (Almeida, 1996; Pearce, 1999). In this chapter, both approaches are therefore considered. The literature first described how ownership-specific advantages were developed at the corporate HQ levels, and leveraged overseas through knowledge transfer.

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