Grazia D. Santangelo

The frontier of international technology networks: sourcing abroad the most highly tacit capabilities

Abstract The increasing geographical dispersion of corporate R&D has been identified as a major feature of the current ICT-based paradigm. Following the finding that innovation which depends most upon tacit knowledge (in the science-based fields, and in the enhancement of a firm’s core competence) tends to remain more agglomerated in the parent company, this paper analyses certain firm-specific cases in which the creation of even science-based and industry-specific core technologies is dispersed internationally. It seems that the main factors driving the occasional geographical dispersion of the creation of these kinds of otherwise highly localised technologies are either locally embedded specialisation which cannot be accessed elsewhere, or company-specific global strategies that utilise the development of an organisationally complex international network for technological learning.

Capitalism, profits and innovation in the new techno-economic paradigm

Abstract. Innovative profits (of the kind conceptualized by Schumpeter) are today being increasingly created through international corporate networks for technological development. Such profits through innovation are encouraged by newer more flexible organizational forms, and further encouraged (unlike in the conventional perspective on profits and on the incentive to innovate) by knowledge flows between firms. Our empirical evidence, based on US patent data, shows that multinational companies are currently more likely to develop abroad technologies which are less science-based, and less dependent upon tacit knowledge. However, within the science-based industries firms may generate abroad some technologies which are heavily dependent on tacit knowledge, but normally in fields that lie outside their own core technological competencies. We find some evidence of a convergence in corporate technological diversification across large firms, facilitated by the now common spread in the use of information and communication technologies (ICT) as an integrator of formerly separate technological systems. This has led smaller firms to diversify, but giant firms to consolidate activity around those technologies that have become most interrelated.

Location and collocation advantages in international innovation

Purpose – This paper examines the role of location‐specific (L) advantages in the spatial distribution of multinational enterprise (MNE) R&D activity. The meaning of L advantages is revisited. In addition to L advantages that are industry‐specific, the paper emphasises that there is an important category of L advantages, referred to as collocation advantages.Design/methodology/approach – Using the OLI framework, this paper highlights that the innovation activities of MNEs are about interaction of these variables, and the essential process of internalising L advantages to enhance and create firm‐specific advantages.Findings – Collocation advantages derive from spatial proximity to specific unaffiliated firms, which may be suppliers, competitors, or customers. It is also argued that L advantages are not always public goods, because they may not be available to all firms at a similar or marginal cost. These costs are associated with access and internalisation of L advantages, and – especially in the case of ...

Foreign Direct Investment and Regional Attractiveness in the EU Integration Process Some Evidence for the Italian Regions

The analysis of foreign direct investment (FDI) in the EU regions has shown changes in both the sectoral composition and the geographical orientation of productive investments operated by multinational enterprises (MNEs). Such variations may be attributable to factors such as the ‘deepening’ of the integration process in the 1980s and the early 1990s and the change in the location strategies of MNEs. Assuming regions as units of analysis with regard to economic integration, this paper provides a first description of where and in which sectors inward FDI is located in Italy, by carrying out a simple analysis at regional level in the period 1985-95. It attempts to shed some light on the characteristic features of Italian regional systems in order to assess their degree of attractiveness for FDI. The geographical distribution of foreign plants in Italy emphasizes the historical imbalances affecting the country, stressing the concentration of FDI in a few advanced regions and the marginalization of the Italian Mezzogiorno. Furthermore, the analysis turns to investigate whether FDI follows regional specialization models by distinguishing between EU and non-EU FDI in sectoral and geographical terms. EU investors turn out to be increasingly related to the sectoral comparative advantages of regional economic systems, while the matching between the specialization of non-EU FDI and that of local firms is relatively less pronounced.

New insights on the role of location advantages in international innovation

This paper takes a closer look at the role of location advantages in the spatial distribution of MNE R&D activity. In doing so, we have returned to first principles by revisiting our understanding of L and O advantages and their interaction. We revisit the meaning of L advantages, and offer a succinct differentiation of L advantages. We emphasise the importance of institutions, and flesh out the concept of collocation L advantages, which play an important role at the industry and firm levels of analysis. Just because a country possesses certain L advantages when viewed at a macro-level, does not imply that these are available to all industries or all firms in that location without differential cost. When these are linked to the distinction between location-bound and non location-bound O advantages, and we distinguish between MNEs and subsidiaries it allows for a clearer understanding of the MNEs spatially distributed activities. These are discussed here in the context of R&D, which - in addition to the usual uncertainties faced by firms - must deal with the uncertainties associated with innovation. Although prior literature has sometimes framed the centralisation/decentralisation, spatial separation/collocation debates as a paradox facing firms, when viewed within the context of the cognitive limits to resources, the complexities of institutions, and the slow pace of the evolving specialisation of locations, these are in actuality trade-offs firms must make.

The significance of European small country regions in the geographical division of labour of European Information and Communications Technology (ICT) corporations

In spite of the development of information and communications technology (ICT), MNCs seem to be highly sensitive to untraded externalities and localised knowledge spillovers in their location strategy. Therefore, in an age in which space and time constraints have been reduced (or even eliminated) by the fast pace of technological change, proximity still matters. Within the global-local nexus debate, the role played in the development of ICT by regions from European small countries has been neglected. Using regionalised patent data granted in the USA to large electronic firms for their European-located research, the aim of this paper is twofold. First of all, the significance of a region- over a nation-state-based analysis is argued. Second, the interaction between local and foreign corporate technological development in small country regions is investigated in order to evaluate the role of these locations in the geographical division of labour in European-owned ICT multinationals.

Location, collocation and innovation by multinational enterprises: a research agenda

Abstract The distribution of creative economic activity over space has been viewed from three distinct perspectives: International business focuses on the multinational enterprise and the location of activities across national borders; economic geography studies the characteristics of the location site; and innovation scholars are mainly concerned with the technologies and knowledge that arises from the interaction of location and the creativity of actors. All these communities have drawn attention to collocation. However, the nexus of the three literatures is surprisingly thin, in particular with regard to the conditions under which collocation is an advantage or a disadvantage. In this paper, we take stock of the knowledge developed by the three communities and move the discussion further by qualifying a number of these conditions. Based on these considerations, we then propose a number of directions for future research.

Evolution of Markets, Technology and M&A

This book examines the issue of mergers and acquisitions (M&As) in the context of technological development, and in particular the impact of M&As on the innovation process. In so doing, the book integrates two bodies of literature, on M&As, and on innovation studies, a nexus which the editors contend represents an important step in the advancement of our understanding of both with clear implications for competitive advantage and growth of firms. Drawing on perspectives from both management and economics, the book offers a cohesive blend of theory, methodology, and a wealth of empirical material.

Internationalization through exaptation: The role of domestic geographical dispersion in the internationalization process

We introduce the notion of exaptation to internationalization theory, a process in which a capability is re-used for a purpose and in a context different than its historical purpose and context. Specifically, we examine which domestic capabilities may be redeployed when organizations engage in cross-border M&As for the first time. We suggest that organizations exapt (re-use) coordination and control capabilities, initially developed to manage domestic geographical dispersion, to acquire and integrate external resources across borders. By analyzing 693 Indian business groups over a decade, we add to the recent effort to frame the internationalization process within evolutionary theory.RésuméNous proposons d’intégrer la notion d’exaptation à la théorie d’internationalisation, un processus dans lequel une capacité est réutilisée dans un but et un contexte différents que le but et le contexte historiques. Plus précisément, nous examinons quelles capacités nationales peuvent être redéployées lorsque des organisations s’engagent pour la première fois dans des fusions-acquisitions (FA) transfrontalières. Nous suggérons que les organisations exaptent (réutilisent) les capacités de coordination et de contrôle, initialement développées pour gérer l’expansion géographique domestique, pour acquérir et intégrer des ressources extérieures transfrontalières. En analysant 693 groupes d’entreprises indiennes sur une décennie, nous contribuons aux efforts récents visant à intégrer le processus d’internationalisation au sein d’une théorie évolutive.ResumenIntroducimos la noción de exaptación a la teoría de internacionalización, un proceso en el cual una capacidad es reutilizada para un propósito y en un contexto diferente a su propósito y contexto histórico. Específicamente, examinamos cuales capacidades domésticas pueden ser reubicarse cuando las organizaciones se involucran en fusiones y adquisiciones por primera vez. Sugerimos que las organizaciones exaptan (reutilizan) las capacidades de coordinación y control, inicialmente desarrolladas para manejar la dispersión geográfica nacional, para adquirir e integrar recursos externos a través de las fronteras. Al analizar 693 grupos empresariales Indios por una década, nos sumamos al esfuerzo reciente para enmarcar el proceso de internacionalización en la teoría evolutiva.ResumoIntroduzimos a noção de exaptação à teoria da internacionalização, um processo no qual uma capacidade é reutilizada para um propósito e em um contexto diferente do seu propósito e contexto histórico. Especificamente, examinamos quais capacidades domésticas podem ser reutilizadas quando as organizações participam de fusões e aquisições transfronteiriças pela primeira vez. Sugerimos que as organizações exaptam (reutilizam) as capacidades de coordenação e controle, inicialmente desenvolvidas para gerenciar a dispersão geográfica doméstica, para adquirir e integrar recursos externos através de fronteiras. Ao analisar 693 grupos empresariais indianos ao longo de uma década, nós contribuímos ao recente esforço para enquadrar o processo de internacionalização na teoria evolutiva.概要我们给国际化理论引入了扩展适应的概念,即在不同于历史目的和情境的某种目的和情境中将能力重复使用的过程。具体而言,我们研究哪些国内能力在组织首次进行跨境并购时可能被重新部署。我们建议,组织扩展适应(重复使用)最初是为了管理国内地理分布而开发的协调和控制能力,以获取和整合跨境的外部资源。通过分析跨越十年的693家印度公司集团,我们对在进化理论内构建国际化进程做出了最新的努力。

When in Rome, do as the Romans do: Subsidiary Autonomy as a Response to Corruption Distance

Research on the HQ-subsidiary relationship that has studied the allocation of decision-making authority within the HQ-subsidiary dyad (i.e. subsidiary autonomy) in relation to the local context has...