International Research and Development and Knowledge Sourcing by Multinational Corporations

Internationalization of R&D facilitates knowledge sourcing of multinational corporations (MNCs) on a global scale. As MNCs internationalize R&D, they not only engage in domestic-driven R&D but are actively involved in overseas-driven R&D. And accordingly, the role of overseas R&D laboratories often evolves, from applying the HQ-generated innovation to local market, to innovating locally and contributing to the parent company. Within an MNC boundary, knowledge flows have become multidirectional: on top of the most typical knowledge flows from headquarters (HQ) to a subsidiary, reverse knowledge flows from a subsidiary to HQ as well as horizontal knowledge flows among overseas subsidiaries have become more salient. In addition to knowledge flows within a firm, increasing attention has been paid to external knowledge sourcing, i.e., knowledge sourcing from foreign locations outside the firm. MNCs commonly engage in local knowledge sourcing, i.e., sourcing knowledge from an overseas local environment, to tap into local hotbeds of innovation. But MNCs are also increasingly conducting global knowledge sourcing, i.e., sourcing knowledge from around the world, to practise global open innovation. Theoretically, knowledge sourcing in international R&D has often been examined from the capability and embeddedness perspectives. The effect of capability has been discussed in connection with motivation, autonomy, and mandates of subsidiaries. The effect of embeddedness has been discussed in connection with complementarity between external and internal embeddedness. As future research agenda, the following are suggested. First, cross-fertilization among the research fields of international R&D, global innovation, and open innovation deserves further attention. Second, greater research focus can be placed on managerial processes of global knowledge sourcing. Third, further research can be advanced on global knowledge sourcing at the team level. Fourth, the association between corporate governance and global knowledge sourcing can be investigated further. Fifth, much more attention needs to be paid to microfoundations of global knowledge sourcing. And lastly, further evolving patterns of global knowledge sourcing by advanced country multinationals (AMNCs) and emerging economies multinationals (EMNCs) continue to be relevant.