IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i8p4579-d539797.html
   My bibliography  Save this article

The Impact of Cross-Border R&D Sourcing on the Innovation Quality of MNCs, from the Perspective of Business Model Innovation

Author

Listed:
  • Yunlong Duan

    (International Business School, Yunnan University of Finance and Economics, Kunming 650032, China)

  • Hanxiao Liu

    (International Business School, Yunnan University of Finance and Economics, Kunming 650032, China)

  • Zhiqing Deng

    (International Business School, Yunnan University of Finance and Economics, Kunming 650032, China)

  • Peng Tao

    (School of Management, Zhejiang University of Technology, Hangzhou 310014, China)

Abstract

In the literature on business model innovation (BMI) in multinational corporations (MNCs), the influence of cross-border R&D (Research and development) sourcing on innovation performance has been widely discussed; however, from a BMI perspective, apart from innovation performance, the innovation quality is also important. In addition, absorptive capacity and institutional distance are important indicators of MNCs’ innovation quality, although there have been few studies of the moderating effects on the relationship between R&D sourcing and innovation quality. Based on this research gap, starting from the perspective of BMI and by constructing a research framework that includes R&D intensity, R&D diversity, and innovation quality, this paper takes China’s high-tech MNCs as the research object to obtain a sustainable innovative business model. Further, absorptive capacity and institutional distance serve as moderating variables to study the moderating role of the relationship between R&D sourcing and the innovation quality of MNCs. This paper presents the following research findings. During the process of cross-border BMI, R&D intensity has a significant, inverted U-shaped relationship with innovation quality; R&D diversity has a significant negative linear relationship with innovation quality; and absorptive capacity and institutional distance each have a moderating effect on the above relationships.

Suggested Citation

  • Yunlong Duan & Hanxiao Liu & Zhiqing Deng & Peng Tao, 2021. "The Impact of Cross-Border R&D Sourcing on the Innovation Quality of MNCs, from the Perspective of Business Model Innovation," Sustainability, MDPI, vol. 13(8), pages 1-22, April.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:8:p:4579-:d:539797
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/8/4579/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/13/8/4579/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Joshua Lerner, 1994. "The Importance of Patent Scope: An Empirical Analysis," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 319-333, Summer.
    2. Singh, Jasjit, 2008. "Distributed R&D, cross-regional knowledge integration and quality of innovative output," Research Policy, Elsevier, vol. 37(1), pages 77-96, February.
    3. Susan E. Feinberg & Anil K. Gupta, 2004. "Knowledge spillovers and the assignment of R&D responsibilities to foreign subsidiaries," Strategic Management Journal, Wiley Blackwell, vol. 25(8‐9), pages 823-845, August.
    4. Nuttawuth Muenjohn & Jun Ishikawa & Peamawat Muenjohn & Mumtaz Ali Memon & Hiram Ting, 2021. "The effect of innovation and leadership on performance in China and Vietnam," Asia Pacific Business Review, Taylor & Francis Journals, vol. 27(1), pages 101-110, January.
    5. Hsu, Chia-Wen & Lien, Yung-Chih & Chen, Homin, 2015. "R&D internationalization and innovation performance," International Business Review, Elsevier, vol. 24(2), pages 187-195.
    6. Fosfuri, Andrea & Tribø, Josep A., 2008. "Exploring the antecedents of potential absorptive capacity and its impact on innovation performance," Omega, Elsevier, vol. 36(2), pages 173-187, April.
    7. Tatiana Kostova & Sjoerd Beugelsdijk & W. Richard Scott & Vincent E. Kunst & Chei Hwee Chua & Marc Essen, 2020. "The construct of institutional distance through the lens of different institutional perspectives: Review, analysis, and recommendations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 467-497, June.
    8. Di Minin, Alberto & Zhang, Jieyin & Gammeltoft, Peter, 2012. "Chinese foreign direct investment in R&D in Europe: A new model of R&D internationalization?," European Management Journal, Elsevier, vol. 30(3), pages 189-203.
    9. Chen, Chung-Jen & Huang, Yi-Fen & Lin, Bou-Wen, 2012. "How firms innovate through R&D internationalization? An S-curve hypothesis," Research Policy, Elsevier, vol. 41(9), pages 1544-1554.
    10. Robert Jensen & Gabriel Szulanski, 2004. "Stickiness and the adaptation of organizational practices in cross-border knowledge transfers," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(6), pages 508-523, November.
    11. Mudambi, Ram & Navarra, Pietro, 2002. "Institutions and internation business: a theoretical overview," International Business Review, Elsevier, vol. 11(6), pages 635-646, December.
    12. John W. Medcof, 2007. "Subsidiary Technology Upgrading and International Technology Transfer, with Reference to China," Asia Pacific Business Review, Taylor & Francis Journals, vol. 13(3), pages 451-469, July.
    13. Duan, Yunlong & Liu, Shuling & Cheng, Hao & Chin, Tachia & Luo, Xuan, 2021. "The moderating effect of absorptive capacity on transnational knowledge spillover and the innovation quality of high-tech industries in host countries: Evidence from the Chinese manufacturing industry," International Journal of Production Economics, Elsevier, vol. 233(C).
    14. Asakawa, Kazuhiro, 2001. "Organizational tension in international R&D management: the case of Japanese firms," Research Policy, Elsevier, vol. 30(5), pages 735-757, May.
    15. Francesca Sanna-Randaccio & Reinhilde Veugelers, 2007. "Multinational knowledge spillovers with decentralised R&D: a game-theoretic approach," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(1), pages 47-63, January.
    16. Yueh, Linda, 2009. "Patent laws and innovation in China," International Review of Law and Economics, Elsevier, vol. 29(4), pages 304-313, December.
    17. María Jesús Nieto & Alicia Rodríguez, 2011. "Offshoring of R&D: Looking abroad to improve innovation performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 42(3), pages 345-361, April.
    18. Wu, Jie & Wang, Chengqi & Hong, Junjie & Piperopoulos, Panagiotis & Zhuo, Shuaihe, 2016. "Internationalization and innovation performance of emerging market enterprises: The role of host-country institutional development," Journal of World Business, Elsevier, vol. 51(2), pages 251-263.
    19. Hurtado-Torres, Nuria E. & Aragón-Correa, J. Alberto & Ortiz-de-Mandojana, Natalia, 2018. "How does R&D internationalization in multinational firms affect their innovative performance? The moderating role of international collaboration in the energy industry," International Business Review, Elsevier, vol. 27(3), pages 514-527.
    20. Yongan Zhang & Umair Khan & Seoyeon Lee & Madiha Salik, 2019. "The Influence of Management Innovation and Technological Innovation on Organization Performance. A Mediating Role of Sustainability," Sustainability, MDPI, vol. 11(2), pages 1-21, January.
    21. Maryam Alavi & Amrit Tiwana, 2002. "Knowledge integration in virtual teams: The potential role of KMS," Journal of the American Society for Information Science and Technology, Association for Information Science & Technology, vol. 53(12), pages 1029-1037, October.
    22. Andrew Delios & Paul W. Beamish, 1999. "Ownership strategy of Japanese firms: transactional, institutional, and experience influences," Strategic Management Journal, Wiley Blackwell, vol. 20(10), pages 915-933, October.
    23. Paul Almeida & Anupama Phene, 2004. "Subsidiaries and knowledge creation: the influence of the MNC and host country on innovation," Strategic Management Journal, Wiley Blackwell, vol. 25(8‐9), pages 847-864, August.
    24. Sunil Venaik & David F Midgley & Timothy M Devinney, 2005. "Dual paths to performance: the impact of global pressures on MNC subsidiary conduct and performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 36(6), pages 655-675, November.
    25. Peisen Liu & Houjian Li, 2020. "Does bank competition spur firm innovation?," Journal of Applied Economics, Taylor & Francis Journals, vol. 23(1), pages 519-538, January.
    26. Yadong Luo & Rosalie L Tung, 2007. "International expansion of emerging market enterprises: A springboard perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 481-498, July.
    27. Hagedoorn, John & Cloodt, Myriam, 2003. "Measuring innovative performance: is there an advantage in using multiple indicators?," Research Policy, Elsevier, vol. 32(8), pages 1365-1379, September.
    28. Joan Penner‐Hahn & J. Myles Shaver, 2005. "Does international research and development increase patent output? An analysis of Japanese pharmaceutical firms," Strategic Management Journal, Wiley Blackwell, vol. 26(2), pages 121-140, February.
    29. Gebauer, Heiko & Worch, Hagen & Truffer, Bernhard, 2012. "Absorptive capacity, learning processes and combinative capabilities as determinants of strategic innovation," European Management Journal, Elsevier, vol. 30(1), pages 57-73.
    30. Chunyang Pan & William X. Wei & Etayankara Muralidharan & Jia Liao & Bernadette Andreosso-O’Callaghan, 2020. "Does China’s Outward Direct Investment Improve the Institutional Quality of the Belt and Road Countries?," Sustainability, MDPI, vol. 12(1), pages 1-21, January.
    31. Haner, Udo-Ernst, 2002. "Innovation quality--a conceptual framework," International Journal of Production Economics, Elsevier, vol. 80(1), pages 31-37, November.
    32. Yifei Sun & Ke Wen, 2007. "Country Relational Distance, Organizational Power and R&D Managers: Understanding Environmental Challenges for Foreign R&D in China," Asia Pacific Business Review, Taylor & Francis Journals, vol. 13(3), pages 425-449, July.
    33. Duan, Yunlong & Wang, Wannan & Zhou, Wei, 2020. "The multiple mediation effect of absorptive capacity on the organizational slack and innovation performance of high-tech manufacturing firms: Evidence from Chinese firms," International Journal of Production Economics, Elsevier, vol. 229(C).
    34. Spyros Arvanitis & Heinz Hollenstein, 2011. "How do different drivers of R&D investment in foreign locations affect domestic firm performance? An analysis based on Swiss panel micro data," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 20(2), pages 605-640, April.
    35. Jean O. Lanjouw & Mark Schankerman, 2004. "Patent Quality and Research Productivity: Measuring Innovation with Multiple Indicators," Economic Journal, Royal Economic Society, vol. 114(495), pages 441-465, April.
    36. Yu, Liping & Li, Huiyang & Wang, Zuogong & Duan, Yunlong, 2019. "Technology imports and self-innovation in the context of innovation quality," International Journal of Production Economics, Elsevier, vol. 214(C), pages 44-52.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fu, Xiaolan & Fu, Xiaoqing (Maggie) & Ghauri, Pervez & Hou, Jun, 2022. "International collaboration and innovation: Evidence from a leading Chinese multinational enterprise," Journal of World Business, Elsevier, vol. 57(4).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hsu, Chia-Wen & Lien, Yung-Chih & Chen, Homin, 2015. "R&D internationalization and innovation performance," International Business Review, Elsevier, vol. 24(2), pages 187-195.
    2. Zhai, Zhe & Ghosal, Vivek, 2022. "Internationalization of innovation and firm performance in the pharmaceutical industry," International Review of Economics & Finance, Elsevier, vol. 80(C), pages 882-905.
    3. Jingjing Li & Gang Liu & Zihan Ma, 2021. "RD internationalization, domestic technology alliance, and innovation in emerging market," PLOS ONE, Public Library of Science, vol. 16(6), pages 1-35, June.
    4. Xun Zhang & Biao Xu, 2019. "R&D Internationalization and Green Innovation? Evidence from Chinese Resource Enterprises and Environmental Enterprises," Sustainability, MDPI, vol. 11(24), pages 1-18, December.
    5. Mashiho Mihalache & Oli Mihalache & Jan Ende, 2021. "International Diversification and MNE Innovativeness: A Contingency Perspective of Foreign Subsidiary Portfolio Characteristics," Management International Review, Springer, vol. 61(6), pages 769-798, December.
    6. Hung, Tung Min & Contractor, Farok & Lo, Yi-Ju, 2022. "Manage the value and liability of offshoring innovation," International Business Review, Elsevier, vol. 31(2).
    7. Tang, Chunhui & Tang, Yaojia & Su, Shengwei, 2019. "R&D internationalization, product diversification and international performance for emerging market enterprises: An empirical study on Chinese enterprises," European Management Journal, Elsevier, vol. 37(4), pages 529-539.
    8. Xiao, Shufeng & Yu, Tianjiao, 2024. "Underperformance duration and R&D internationalization: Institutional contingencies in an emerging economy," International Business Review, Elsevier, vol. 33(4).
    9. Vrontis, Demetris & Christofi, Michael, 2021. "R&D internationalization and innovation: A systematic review, integrative framework and future research directions," Journal of Business Research, Elsevier, vol. 128(C), pages 812-823.
    10. Jaana Rahko, 2016. "Internationalization of corporate R&D activities and innovation performance," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 25(6), pages 1019-1038.
    11. Sasa Ding & Frank McDonald & Yingqi Wei, 2021. "Is Internationalization Beneficial to Innovation? Evidence from a Meta-analysis," Management International Review, Springer, vol. 61(4), pages 469-519, August.
    12. Kerstin J. Schaefer & Ingo Liefner, 2017. "Offshore versus domestic: Can EM MNCs reach higher R&D quality abroad?," Scientometrics, Springer;Akadémiai Kiadó, vol. 113(3), pages 1349-1370, December.
    13. Hurtado-Torres, Nuria E. & Aragón-Correa, J. Alberto & Ortiz-de-Mandojana, Natalia, 2018. "How does R&D internationalization in multinational firms affect their innovative performance? The moderating role of international collaboration in the energy industry," International Business Review, Elsevier, vol. 27(3), pages 514-527.
    14. Duan, Yunlong & Liu, Shuling & Cheng, Hao & Chin, Tachia & Luo, Xuan, 2021. "The moderating effect of absorptive capacity on transnational knowledge spillover and the innovation quality of high-tech industries in host countries: Evidence from the Chinese manufacturing industry," International Journal of Production Economics, Elsevier, vol. 233(C).
    15. René Belderbos & Boris Lokshin & Bert Sadowski, 2015. "The returns to foreign R&D," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 46(4), pages 491-504, May.
    16. Sommer, Daniel & Bhandari, Krishna Raj, 2022. "Internationalization of R&D and Innovation Performance in the Pharma Industry," Journal of International Management, Elsevier, vol. 28(3).
    17. Thakur-Wernz, Pooja & Cantwell, John & Samant, Shantala, 2019. "Impact of international entry choices on the nature and type of innovation: Evidence from emerging economy firms from the Indian bio-pharmaceutical industry," International Business Review, Elsevier, vol. 28(6), pages 1-1.
    18. Xu, Chen & Xiong, Yan & Sun, Yuanxin & Liu, Yipeng, 2021. "Genetic distance, international experience and the performance of cross-border R&D for EMNEs," Journal of International Management, Elsevier, vol. 27(2).
    19. Hsin-Ning Su, 2017. "Global Interdependence of Collaborative R&D-Typology and Association of International Co-Patenting," Sustainability, MDPI, vol. 9(4), pages 1-28, April.
    20. Hohberger, Jan & Wilden, Ralf, 2022. "Geographic diversity of knowledge inputs: The importance of aligning locations of knowledge inputs and inventors," Journal of Business Research, Elsevier, vol. 145(C), pages 705-719.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:13:y:2021:i:8:p:4579-:d:539797. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.