Research On Reverse Innovation Transfer'Impact In Multinational Corporations:Theoretical Investigation And Empirical Research

More and more multinational corporation subsidiaries are undertaking innovation tasks and transfer them to the parent company,which has become an important issue in the practice of multinational corporation management.This phenomenon has attracted wide attention of the managers in the industry,but there is lack of attention and scant research in the academic areas.Compared with the traditional knowledge transfer in international business,reverse innovation transfer is more complex.Although,existing research has recognized that subsidiary innovation and innovation transfer has a positive effect on subsidiary power,another possible explanation is that a subsidiary may engage in outward interorganizational transfer of innovation,which may result in the loss of the subsidiary power.Therefore,what the relationship between subsidiary reverse transfer of innovation and subsidiary power,and what are the mechanisms between them? Existing literature does not provide a reasonable explanation.In order to fill the above mentioned research gap,based on internalization theory,knowledge-based theory and resource dependence theory,we explored the different effects of subsidiary reverse innovation transfer on subsidiary power(identification effect and competition effect)to reveal the mechanisms of subsidiary reverse innovation transfer's influence on subsidiary more clearly.As such,the investigation of the above mechanisms can guide the subsidiary power to help the subsidiaries play a contributor role in the multinational corporation development.Based on the above research logic,this study contributes to the existing research by extension and supplement from the following aspects:First,this study discusses the two effects caused by the subsidiary reverse innovation transfer and diffusion process: identification effect and competition effect.Namely,subsidiary reverse innovation frequency will induce two different effects on subsidiary power.One effect shows that the parent company actively undertake and implement the innovation,that is,the identification effect.The second effect indicates that the increase of intrafirm competition intensity in the multinational corporation.We propose that these two effects will influence the subsidiary power in opposite direction.The assumption of the above two effects can further explain the complicated mechanisms of subsidiary reverse innovation transfer's effect on subsidiary power.Second,this dissertation further reveals the contingent factors that will influence the mechanisms of between subsidiary reverse innovation transfer and subsidiary power.We propose that the relationship between subsidiary reverse innovation transfer frequency and competition intensity and the relationship between subsidiary reverse innovation transfer frequency and parent-subsidiary innovation integration are moderated by the characteristics of innovation(degree of innovation customization).The relationship between parent-subsidiary innovation integration and the subsidiary power and the relationship between intrafirm competition intensity and subsidiary power are moderated by subsidiary power retention strategy(boundary spanning capacity).Third,in order to further explore the strategic significance of subsidiary power in the whole multinational corporation,this dissertation also discusses the relationship between the subsidiary power and the parent benefits,as well as the relationship between subsidiary power and subsidiary performance.Using data of multiinformant questionnaire from 111 multinational subsidiaries,this dissertation examines the influence of subsidiary reverse innovation transfer frequency on parent-subsidiary innovation integration and intrafirm competition intensity using hierarchical regression analysis method.Furthermore,we test the moderating role of innovation customization and boundary spanning capacity.The results of this study are as follows:First,frequency of subsidiary reverse innovation transfer enhances the parentsubsidiary innovation integration and intrafirm competition intensity.The results show that subsidiary reverse innovation transfer frequency has a significantly positive effect on parent-subsidiary innovation integration.Reverse innovation transfer frequency also has a positive impact on intrafirm competition intensity significantly.Second,parent-subsidiary innovation integration is postitively related to subsidiary power significantly,and intrafirm competition intensity does not influence subsidiary power significantly.Third,innovation customization plays a significant negative moderating role in the relationship between reverse innovation transfer frequency and parent-subsidiary innovation integration.However,the moderating effect of innovation customization on the relationship between reverse innovation transfer frequency and intrafirm competition intensity is not significant.Fourth,subsidiary boundary spanning capacity enhances the relationship between parent-subsidiary innovation integration and subsidiary power.However,subsidiary boundary spanning capacity does not moderate the relationship between competition intensity and the subsidiary power significantly.Finally,subsidiary power has a significantly positive effect on subsidiary performance.The hypothesis of subsidiary power's positive effect on parent benefits is also supported.