Value-chain networks are of major importance to multinational subsidiaries, yet they have failed to receive significant attention in the literature. We extend the knowledge-based view of the firm by exploring whether three different types of multinational subsidiary networks have dissimilar impact on their entrepreneurial output. Entrepreneurial output can generate superior performance and positive externalities to the subsidiary. Based on a large-scale study of 268 multinational subsidiaries in the UK, we find that value-chain networks have a higher positive impact than multinational corporation (MNC) networks and non value-chain networks; because they may provide the subsidiary knowledge with market opportunities that it lacks and that the other types of networks cannot effectively provide. However, value-chain networks have a negative effect on entrepreneurial output of a subsidiary operating in an environment of high uncertainty; because they can constrain the exploration and creation of new knowledge that cannot be provided by any of the networks. Contrary to our expectations, the combined effect of value-chain and non-value chain networks has a negative influence on entrepreneurial output; and, the combined effect of value-chain and MNC networks does not affect entrepreneurial output. Research and managerial implications are discussed.
Academy of International Business. Annual Meeting. Proceedings, 2011
Main Research Area:
Academy of International Business. Annual Meeting. Proceedings