The coevolution of international scope and technological knowledge in MNCs

Christian Geisler Asmussen, Niron Hashai*, Andrew Delios

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)

Abstract

We explore coevolution in the growth of technological knowledge and international scope in multinational corporations (MNCs). We focus on technological knowledge and international scope because they are core to the performance of MNCs and because research has found that technological knowledge stimulates international growth, while internationalization stimulates technological growth. We address this seeming paradox by consolidating arguments about their growth under the coevolutionary umbrella. In so doing, we advance a novel coevolutionary argument: technological knowledge and international scope are both outcomes of interdependent, long-term strategic decisions aimed at optimizing the complementary effects of both dimensions on MNC performance. Accordingly, we develop a formal model of the dynamic processes by which technological knowledge and international scope coevolve. Our dynamic optimization model identifies four coevolutionary trajectories: (1) a trajectory in which growth in technological knowledge and international scope occur simultaneously; (2) a trajectory that has simultaneous reductions in both; (3) a trajectory in which technologically rich but domestically oriented firms expand international scope but reduce technological knowledge; and (4) a trajectory in which highly internationalized but technologically lagging firms expand technological knowledge but reduce international scope.

Original languageEnglish
Article number101285
JournalJOURNAL OF WORLD BUSINESS
Volume57
Issue number1
Early online date20 Nov 2021
DOIs
Publication statusPublished - Jan 2022

Keywords

  • Coevolution
  • Foreign direct investment
  • International scope
  • Internationalization
  • Technological knowledge

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