MNE Competence-Creating Subsidiary Mandates: An Empirical Investigation

University of Reading Discussion Papers in Investment & Management, No. 12-285

45 Pages Posted: 8 Nov 2001

See all articles by Ram Mudambi

Ram Mudambi

Temple University - Department of Strategic Management

John A. Cantwell

Rutgers Business School - Newark and New Brunswick

Date Written: July 2001

Abstract

The determinants of R&D-intensity differ between subsidiaries in an MNE. The qualitative nature of R&D behavior (and hence also the extent of investment in R&D) differs, depending upon whether a subsidiary achieves a competence-creating output mandate. Using data on UK subsidiaries of non-UK MNEs, we find that the R&D investments of subsidiaries with mandates is both qualitatively and quantitatively different from that of subsidiaries that do not. The R&D of mandated subsidiaries depends upon local infrastructure, subsidiary strategic independence and product diversification; but for non-mandated subsidiaries R&D depends instead upon entry mode, and local demand conditions. A revised version of this paper has appeared in the Strategic Management Journal, Vol.26, No. 12, pp. 1109-1128, 2005.

Keywords: MNEs, Firm competencies, R&D, Subsidiary, Mandates, Internationalization

JEL Classification: F23, O32, O38, L23

Suggested Citation

Mudambi, Ram and Cantwell, John A., MNE Competence-Creating Subsidiary Mandates: An Empirical Investigation (July 2001). University of Reading Discussion Papers in Investment & Management, No. 12-285, Available at SSRN: https://ssrn.com/abstract=289695 or http://dx.doi.org/10.2139/ssrn.289695

Ram Mudambi (Contact Author)

Temple University - Department of Strategic Management ( email )

Fox School of Business and Management
Philadelphia, PA 19122
United States
215-204-2099 (Phone)
215-204-8029 (Fax)

HOME PAGE: http://sbm.temple.edu/~rmudambi/index.html

John A. Cantwell

Rutgers Business School - Newark and New Brunswick ( email )

1 Washington Park
Newark, NJ 07102
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
288
Abstract Views
2,709
rank
115,507
PlumX Metrics