TY - JOUR
T1 - Regionalization of R&D activities
T2 - (Dis)economies of interdependence and inventive performance
AU - Kim, Minyoung
AU - Lampert, Curba Morris
AU - Roy, Raja
N1 - Funding Information:
We appreciate the insightful comments and suggestions from Editor Alain Verbeke and three anonymous reviewers. We especially thank our Showcase Panelists, Yves Doz, Connie Helfat, David Teece, and Alain Verbeke at the SMS 38th Annual Conference, ‘‘Strategies in the Era of De-Globalization,’’ in Paris, France, whose collective works inspired this paper. The authors are also indebted to the many helpful discussions with treasured colleagues, including Rajshree Agarwal, Sharon Alvarez, Laura Cardinal, Ajai Gaur, Gwen Lee, Dan Levinthal, Chet Miller, Will Mitchell, Mahka Moeen, Ram Mudambi, Francisco Polidoro, Frank Rothaermel, Melissa Schilling, Deepak Somaya, Chris Tucci, Fred Walumbwa, Brian Wu, Margarethe Wiersema, and Ed Zajac. We dedicate this paper to Gideon Markman, the catalyst who brought us all together in Denver. Last, but certainly not least, the authors gratefully acknowledge the financial support provided by FIU CIBER and their respective institutions.
Publisher Copyright:
© 2020, Academy of International Business.
PY - 2020/9/1
Y1 - 2020/9/1
N2 - This paper examines the impact of the extent of the regionalization of MNEs’ R&D activities on their inventive performance. By joining the regionalization theory with the recombinant view of invention, we challenge the implicit assumption that all foreign knowledge-seeking activities will necessarily offer new knowledge to the firm. We introduce the (dis)economies of interdependence, defined as the (dis)advantages that the firm derives due to the interdependence among countries within a region, as a new theoretical mechanism explaining the benefits and costs of regionalization. Our analysis of global pharmaceutical firms shows that an inverted U-shaped relationship exists between the number of regions in which a firm has R&D activities and its inventive performance. Our results also indicate that a firm’s recombinant capability moderates the inverted U-shaped relationship in such a way that, when a firm’s recombinant capability is high, it reaches its turning point in a larger number of regions and the inverted U-shaped relationship is flatter. These results underscore that recombinant capability significantly influences the firm’s ability to derive benefits and reduce costs from the regionalization of its R&D activities. Our findings suggest that it is through the consideration of the (dis)economies of interdependence that offers the essential reasoning needed to unwind the inferred assumption that all foreign knowledge-seeking activities will offer access to new knowledge.
AB - This paper examines the impact of the extent of the regionalization of MNEs’ R&D activities on their inventive performance. By joining the regionalization theory with the recombinant view of invention, we challenge the implicit assumption that all foreign knowledge-seeking activities will necessarily offer new knowledge to the firm. We introduce the (dis)economies of interdependence, defined as the (dis)advantages that the firm derives due to the interdependence among countries within a region, as a new theoretical mechanism explaining the benefits and costs of regionalization. Our analysis of global pharmaceutical firms shows that an inverted U-shaped relationship exists between the number of regions in which a firm has R&D activities and its inventive performance. Our results also indicate that a firm’s recombinant capability moderates the inverted U-shaped relationship in such a way that, when a firm’s recombinant capability is high, it reaches its turning point in a larger number of regions and the inverted U-shaped relationship is flatter. These results underscore that recombinant capability significantly influences the firm’s ability to derive benefits and reduce costs from the regionalization of its R&D activities. Our findings suggest that it is through the consideration of the (dis)economies of interdependence that offers the essential reasoning needed to unwind the inferred assumption that all foreign knowledge-seeking activities will offer access to new knowledge.
KW - (dis)economies of interdependence
KW - R&D activities
KW - inventive performance
KW - regionalization
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U2 - 10.1057/s41267-020-00314-0
DO - 10.1057/s41267-020-00314-0
M3 - Article
AN - SCOPUS:85082122044
SN - 0047-2506
VL - 51
SP - 1054
EP - 1075
JO - Journal of International Business Studies
JF - Journal of International Business Studies
IS - 7
ER -