Transnational Corporations

This journal takes a fresh look at major legal, sectorial, regional and environmental issues facing corporations operating internationally. Released three times a year, it provides in-depth policy-oriented research findings on significant issues relating to the activities of transnational corporations.


How subsidiaries influence innovation in the MNE value chain

As multinational enterprises increasingly disaggregate their value chains and assign functional responsibilities to foreign subsidiaries, they are increasingly focused on augmenting spatially distant activities and resources. At the same time, despite subsidiary managers operating at the “middle” of the organization and having awareness of operational and strategic contexts, they have received significant criticism for hindering the successful coordination and integration of value chain activities. This appears counterintuitive as, on the one hand, MNEs are increasingly disaggregating their value chains and, on the other, subsidiary managers act as frontline managers, at the intersection of their local context and the MNE. We examine the resource stocks of six subsidiaries and the activities of subsidiary managers locally and across global value chains. The results indicate that integration responsibilities are decentralized, as properties of subsidiary mandates, and that the subsidiary managers’ connectivity activities significantly affect the strategic influence that they subsidiary can exercise locally and globally. The results also contain important information for policymakers.


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