The roles of external embeddedness and institutional distance in the subsidiary product/process innovation and R&D capacity
Purpose: This study aims to look at the relationship of external embeddedness and institutional distance (governance aspects) with the foreign subsidiary research and development (R&D) capacity. Furthermore, it examines whether these relationships are mediated by subsidiary product and process innovation, and whether institutional distance plays a moderating role in the relationship between subsidiary innovation and R&D capacity. Design/methodology/approach: The authors draw on survey data from 130 foreign subsidiaries operating in Brazil and test their model using variance-based structural equation modeling. Findings: Results suggest that subsidiary (product and process) innovation fully mediates the relationships between: subsidiary external embeddedness and R&D capacity; and institutional distance and subsidiary R&D capacity, such that the relationship is positive in case of the former and negative in case of the latter. The relationship between subsidiary product and process innovation and R&D capacity is positive and stronger at lower levels of institutional distance. Originality/value: The research ignores the underlying mechanisms of the external embeddedness and institutional distance relationship with subsidiary R&D capacity. Furthermore, institutional distance based on formal governance aspects and their impacts on subsidiary innovation and R&D capacity are rarely investigated. This paper contributes with regard to these aspects.
Year of publication: |
2020
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Authors: | Rodrigues, Cristina Doritta ; Borini, Felipe Mendes ; Raziq, Muhammad Mustafa ; Bernardes, Roberto Carlos |
Published in: |
Journal of Knowledge Management. - Emerald, ISSN 1367-3270, ZDB-ID 2009195-3. - Vol. 24.2020, 10 (30.09.), p. 2513-2530
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Publisher: |
Emerald |
Saved in:
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