IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v58y2012i4p734-753.html
   My bibliography  Save this article

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.1110.1451
    Download Restriction: no

    File URL: https://libkey.io/10.1287/mnsc.1110.1451?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Juan Alcácer & Michelle Gittelman, 2006. "Patent Citations as a Measure of Knowledge Flows: The Influence of Examiner Citations," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 774-779, November.
    2. Gary Dushnitsky & J. Myles Shaver, 2009. "Limitations to interorganizational knowledge acquisition: the paradox of corporate venture capital," Strategic Management Journal, Wiley Blackwell, vol. 30(10), pages 1045-1064, October.
    3. David J. TEECE, 2008. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," World Scientific Book Chapters, in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 5, pages 67-87, World Scientific Publishing Co. Pte. Ltd..
    4. Schrader, Stephan, 1991. "Informal technology transfer between firms: Cooperation through information trading," Research Policy, Elsevier, vol. 20(2), pages 153-170, April.
    5. Raghuram G. Rajan & Luigi Zingales, 2001. "The Firm as a Dedicated Hierarchy: A Theory of the Origins and Growth of Firms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(3), pages 805-851.
    6. Bronwyn H. Hall & Adam Jaffe & Manuel Trajtenberg, 2005. "Market Value and Patent Citations," RAND Journal of Economics, The RAND Corporation, vol. 36(1), pages 16-38, Spring.
    7. Anil K. Gupta & Vijay Govindarajan, 2000. "Knowledge flows within multinational corporations," Strategic Management Journal, Wiley Blackwell, vol. 21(4), pages 473-496, April.
    8. Delgado, Mercedes & Porter, Michael E. & Stern, Scott, 2014. "Clusters, convergence, and economic performance," Research Policy, Elsevier, vol. 43(10), pages 1785-1799.
    9. Bruce Kogut & Udo Zander, 1993. "Knowledge of the Firm and the Evolutionary Theory of the Multinational Corporation," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 24(4), pages 625-645, December.
    10. Ellison, Glenn & Glaeser, Edward L, 1997. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 889-927, October.
    11. 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.
    12. Paul Almeida & Bruce Kogut, 1999. "Localization of Knowledge and the Mobility of Engineers in Regional Networks," Management Science, INFORMS, vol. 45(7), pages 905-917, July.
    13. Bruno Cassiman & Reinhilde Veugelers, 2002. "R&D Cooperation and Spillovers: Some Empirical Evidence from Belgium," American Economic Review, American Economic Association, vol. 92(4), pages 1169-1184, September.
    14. Manuel Trajtenberg & Rebecca Henderson & Adam Jaffe, 1997. "University Versus Corporate Patents: A Window On The Basicness Of Invention," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 5(1), pages 19-50.
    15. Rajshree Agarwal & Martin Ganco & Rosemarie H. Ziedonis, 2009. "Reputations for toughness in patent enforcement: implications for knowledge spillovers via inventor mobility," Strategic Management Journal, Wiley Blackwell, vol. 30(13), pages 1349-1374, December.
    16. Joanne E. Oxley & Rachelle C. Sampson, 2004. "The scope and governance of international R&D alliances," Strategic Management Journal, Wiley Blackwell, vol. 25(8‐9), pages 723-749, August.
    17. Toby E. Stuart, 2000. "Interorganizational alliances and the performance of firms: a study of growth and innovation rates in a high‐technology industry," Strategic Management Journal, Wiley Blackwell, vol. 21(8), pages 791-811, August.
    18. Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, vol. 82(5), pages 1293-1306, December.
    19. Constance E. Helfat, 1994. "Firm-Specificity in Corporate Applied R&D," Organization Science, INFORMS, vol. 5(2), pages 173-184, May.
    20. Bergek, Anna & Bruzelius, Maria, 2010. "Are patents with multiple inventors from different countries a good indicator of international R&D collaboration? The case of ABB," Research Policy, Elsevier, vol. 39(10), pages 1321-1334, December.
    21. J. Myles Shaver & Fredrick Flyer, 2000. "Agglomeration economies, firm heterogeneity, and foreign direct investment in the United States," Strategic Management Journal, Wiley Blackwell, vol. 21(12), pages 1175-1193, December.
    22. Minyuan Zhao, 2006. "Conducting R& D in Countries with Weak Intellectual Property Rights Protection," Management Science, INFORMS, vol. 52(8), pages 1185-1199, August.
    23. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-640, June.
    24. Wesley M. Cohen & Richard R. Nelson & John P. Walsh, 2000. "Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not)," NBER Working Papers 7552, National Bureau of Economic Research, Inc.
    25. Pisano, Gary, 2006. "Profiting from innovation and the intellectual property revolution," Research Policy, Elsevier, vol. 35(8), pages 1122-1130, October.
    26. Wilbur Chung & Juan Alcácer, 2002. "Knowledge Seeking and Location Choice of Foreign Direct Investment in the United States," Management Science, INFORMS, vol. 48(12), pages 1534-1554, December.
    27. B. Douglas Bernheim & Michael D. Whinston, 1990. "Multimarket Contact and Collusive Behavior," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 1-26, Spring.
    28. Michelle Gittelman & Bruce Kogut, 2003. "Does Good Science Lead to Valuable Knowledge? Biotechnology Firms and the Evolutionary Logic of Citation Patterns," Management Science, INFORMS, vol. 49(4), pages 366-382, April.
    29. Spence, Michael, 1984. "Cost Reduction, Competition, and Industry Performance," Econometrica, Econometric Society, vol. 52(1), pages 101-121, January.
    30. 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.
    31. Andrea Fosfuri & Marco S. Giarratana & Alessandra Luzzi, 2008. "The Penguin Has Entered the Building: The Commercialization of Open Source Software Products," Organization Science, INFORMS, vol. 19(2), pages 292-305, April.
    Full references (including those not matched with items on IDEAS)

    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. Shixiang Wang & Minyuan Zhao, 2018. "A tale of two distances: a study of technological distance, geographic distance and multilocation firms," Journal of Economic Geography, Oxford University Press, vol. 18(5), pages 1091-1120.
    2. Kafouros, Mario I. & Buckley, Peter J. & Clegg, Jeremy, 2012. "The effects of global knowledge reservoirs on the productivity of multinational enterprises: The role of international depth and breadth," Research Policy, Elsevier, vol. 41(5), pages 848-861.
    3. Ren� Belderbos & Dieter Somers, 2015. "Do Technology Leaders Deter Inward R&D Investments? Evidence from Regional R&D Location Decisions in Europe," Regional Studies, Taylor & Francis Journals, vol. 49(11), pages 1805-1821, November.
    4. Alessandra Perri & Raffaele Oriani & Francesco Rullani, 2012. "Does Co-Location Accelerate Knowledge Outflows from FDI? The Role of MNC Subsidiaries' Technology Sourcing Strategies," DRUID Working Papers 12-09, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    5. 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.
    6. Perri, Alessandra & Andersson, Ulf, 2014. "Knowledge outflows from foreign subsidiaries and the tension between knowledge creation and knowledge protection: Evidence from the semiconductor industry," International Business Review, Elsevier, vol. 23(1), pages 63-75.
    7. Alessandra Perri & Raffaele Oriani & Francesco Rullani, 2013. "Knowledge breadth of MNC subsidiaries and the duration of host-country firms' search," Working Papers 7, Venice School of Management - Department of Management, Università Ca' Foscari Venezia.
    8. Andrew Inkpen & Dana Minbaeva & Eric W K Tsang, 2019. "Unintentional, unavoidable, and beneficial knowledge leakage from the multinational enterprise," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(2), pages 250-260, March.
    9. de Faria, Pedro & Sofka, Wolfgang, 2010. "Knowledge protection strategies of multinational firms--A cross-country comparison," Research Policy, Elsevier, vol. 39(7), pages 956-968, September.
    10. Ashish Arora & Michelle Gittelman & Sarah Kaplan & John Lynch & Will Mitchell & Nicolaj Siggelkow & Juan Alcácer & Minyuan Zhao, 2016. "Zooming in: A practical manual for identifying geographic clusters," Strategic Management Journal, Wiley Blackwell, vol. 37(1), pages 10-21, January.
    11. Pengfei Li & Harald Bathelt, 2018. "Location strategy in cluster networks," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(8), pages 967-989, October.
    12. Boeker, Warren & Howard, Michael D. & Basu, Sandip & Sahaym, Arvin, 2021. "Interpersonal relationships, digital technologies, and innovation in entrepreneurial ventures," Journal of Business Research, Elsevier, vol. 125(C), pages 495-507.
    13. Danai Christopoulou & Nikolaos Papageorgiadis & Chengang Wang & Georgios Magkonis, 2021. "IPR Law Protection and Enforcement and the Effect on Horizontal Productivity Spillovers from Inward FDI to Domestic Firms: A Meta-analysis," Management International Review, Springer, vol. 61(2), pages 235-266, April.
    14. Karin Beukel & Minyuan Zhao, 2018. "IP litigation is local, but those who litigate are global," Journal of International Business Policy, Palgrave Macmillan, vol. 1(1), pages 53-70, June.
    15. Lorena D’Agostino, 2015. "The neglected effects of R&D captive offshoring in emerging countries on the creation of knowledge at home," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(1), pages 61-91, March.
    16. Huang, Kenneth Guang-Lih & Huang, Can & Shen, Huijun & Mao, Hao, 2021. "Assessing the value of China's patented inventions," Technological Forecasting and Social Change, Elsevier, vol. 170(C).
    17. Alessandra Perri & Ulf Andersson, 2012. "Knowledge outflows from foreign subsidiaries: The tension between knowledge creation and knowledge protection," Working Papers 18, Venice School of Management - Department of Management, Università Ca' Foscari Venezia.
    18. Sofka, Wolfgang & Shehu, Edlira & de Faria, Pedro, 2014. "Multinational subsidiary knowledge protection—Do mandates and clusters matter?," Research Policy, Elsevier, vol. 43(8), pages 1320-1333.
    19. Venturini, Roberto & Ceccagnoli, Marco & van Zeebroeck, Nicolas, 2019. "Knowledge integration in the shadow of tacit spillovers: Empirical evidence from U.S. R&D labs," Research Policy, Elsevier, vol. 48(1), pages 180-205.
    20. Eunkwang Seo & Hyo Kang & Jaeyong Song, 0. "Blending talents for innovation: Team composition for cross-border R&D collaboration within multinational corporations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 0, pages 1-35.

    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:inm:ormnsc:v:58:y:2012:i:4:p:734-753. 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: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    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.