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Local R&D Strategies and Multilocation Firms: The Role of Internal Linkages

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  • Juan Alcácer

    (Harvard Business School, Harvard University, Boston, Massachusetts 02163)

  • Minyuan Zhao

    (Ross School of Business, University of Michigan, Ann Arbor, Michigan 48109)

Abstract

This study looks at the role of internal linkages in highly competitive clusters. We argue that, in addition to serving as a mechanism for sourcing knowledge, strong internal linkages help firms increase internalization and create higher levels of technological interdependence across firm locations. Firms with strong networks of internal linkages are able to maintain tighter control over local innovation and reduce the risk that knowledge outflows will advantage competitors in clusters. Our empirical analysis of the global semiconductor industry shows that industry leaders intensify internal linkages across locations when they collocate with direct market competitors, but not when they collocate with innovators in the same technological field. We also find that internal linkages are associated with more knowledge flow within firms and less knowledge expropriation by collocated competitors. Our results suggest that future research in cluster innovation should consider the critical role of multilocation firms, their internal organization across clusters, and their responses to technological and market competition in clusters. This paper was accepted by Bruno Cassiman, business strategy.

Suggested Citation

  • Juan Alcácer & Minyuan Zhao, 2012. "Local R&D Strategies and Multilocation Firms: The Role of Internal Linkages," Management Science, INFORMS, vol. 58(4), pages 734-753, April.
    • Handle: RePEc:inm:ormnsc:v:58:y:2012:i:4:p:734-753
    DOI: 10.1287/mnsc.1110.1451
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    References listed on IDEAS

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