Opportunity identification in MNC subsidiaries: context and performance implications

This thesis brings together notions from the distinctive fields of international business and entrepreneurship in order to examine the under-investigated theme of Opportunity Identification (OI) within an entirely new context, that of the multinational subsidiary. Despite its centrality in entrepreneurship research, the notion of OI still lies at an embryonic stage of investigation, particularly as an organisation-wide phenomenon. Especially with respect to the multinational subsidiary, the concept of OI has not been examined per se, regardless of studies proving that entrepreneurial subsidiaries of MNCs can also be actively involved in the identification and pursuit of innovative ideas. In addressing the above key gaps, the present thesis develops a resource-based framework that examines both antecedents and outcomes of OI at the individual subsidiary level. This framework essentially integrates theoretical perspectives on subsidiary entrepreneurship and OI under a Resource-Based View (RBV) of the multinational subsidiary. This constitutes an innovative approach both in the subsidiary-related and entrepreneurship literature. This study adopts a mixed methods approach in combining qualitative theory building and quantitative theory testing within a two-staged research methodology. The first stage involved conducting exploratory case studies in 6 Scottish “entrepreneurial” subsidiaries, given the scarcity of relevant empirical work. The second stage involved carrying out a large-scale mail survey on U.S., European, and Japanese subsidiaries operating in the UK. An overall response rate of 16% was achieved. Quantitative data analysis entailed hypotheses testing through both Multiple Regression and Structural Equation (SEM) models. This study conceptualises subsidiary entrepreneurship as a notion broader than subsidiary initiative, comprising not only radical change and innovation, but also less fundamental but still significant improvements that continuously take place at the subsidiary level. The findings prove that subsidiary entrepreneurship is essentially driven by opportunities identified at the subsidiary level. For the identification of these opportunities, particular subsidiary-specific “entrepreneurial capabilities”, such as the subsidiary’s innovation propensity, risk attitude and external networking with non-direct value-chain members, are critical. Also, factors determining the parent-subsidiary relationship, such as the subsidiary’s autonomy levels and the flows of “strategic” knowledge and skills between the subsidiary and the parent, provide access to unique and valuable resources that can expand the subsidiary’s opportunity set. However, the external environment, both local and international, was not found to pose a significant direct effect on subsidiary OI. This study concludes with establishing a positive link between subsidiary entrepreneurship and performance. Implications for theory, practice and policy making are discussed. Major contributions of this study to theory include the development of a more holistic conceptualisation and measurement of subsidiary entrepreneurship, along with the adoption of a Resource-Based View (RBV) of the multinational subsidiary, which establishes the existence of specific “entrepreneurial” capabilities at the subsidiary level

A missing operationalization: entrepreneurial competencies in multinational enterprise subsidiaries

We seek to provide a comprehensive operationalization of firm-specific variables that constitute multinational enterprise subsidiary entrepreneurial competencies. Towards this objective, we bring together notions from the fields of entrepreneurship and international business. Drawing on an empirical study of 260 subsidiaries located in the UK, we propose a comprehensive set of scales encompassing innovativeness, risk-taking, proactiveness, learning, intra-multinational networking, extra-multinational networking and autonomy; which capture distinct subsidiary entrepreneurial competencies at the subsidiary level. Research and managerial implications are discussed

Regional location of multinational corporation subsidiaries and economic development contribution: Evidence from the UK

The regional location of multinational corporation (MNC) subsidiaries in their host country and their associated entrepreneurial output and networking activities are likely to affect their economic development contribution, measured in terms of technology and management know-how transfers; enhancement of innovativeness of other firms; and company spinoffs. This theme has considerable research and public policy value. We investigate the issue drawing from a large-scale study of 264 MNC subsidiaries based in the UK. The findings show that activities in developed regions are associated with higher economic development contribution than those in less developed regions. Moreover, entrepreneurial output and networking with partners external to the MNC system positively affect economic development contribution. Key implications of this study are that entrepreneurship critically influences economic development contribution, underlying the importance of the MNC subsidiary research stream; and that the policy practice of supply-side measures fostering entrepreneurial output and embeddedness in local networks seems to be appropriate to pursue.Multinational subsidiaries Economic development UK regions International entrepreneurship

The multinational enterprise and subsidiary evolution: Scotland since 1945

This paper explores the major developments in the multinational enterprise (MNE) literature; along with the research conducted on Scottish-based MNE subsidiaries and the policy changes that have taken place in Scotland aimed at promoting foreign direct investment (FDI). It is suggested that subsidiaries may evolve from the branch plant to the developmental and the entrepreneurial subsidiary type; with each of these three subsidiary types contributing differently to the economic development of the host country. The empirical evidence from an in-depth analysis of IBM, Greenock, Scotland attests to the importance of the entrepreneurial subsidiary activities for the host economy. Implications for research and public policy are discussed.multinational enterprise subsidiary, foreign direct investment, subsidiary evolution, branch plant, developmental subsidiary, entrepreneurial subsidiary, economic development, Scotland,

"Where to” Micromultinationals?:A Tribute to Professor Pavlos Dimitratos

This reflection serves as a tribute to Professor Pavlos Dimitratos by providing a state-of-the-art understanding of micromultinationals (mMNEs), an important term initially coined by Pavlos and his colleagues (2003) in their European Management Journal article “Micromultinationals: New Types of Firms for the Global Competitive Landscape” to capture the rising phenomenon of international small- and medium-sized enterprises (SMEs) with advanced modes of entry. Whilst underexplored, such firms have critical research, managerial, and policymaking implications for their increasing population and significant value-added activities in home and host economies relative to exporting firms. Based on a short analysis of existing mMNE studies, we appeal for more scholarly attention to their evolution, behavioural characteristics, and consequences, particularly in the area of SME internationalisation. We suggest several promising future directions to investigate this intriguing type of entrepreneurial firms and, using a Scottish context, show how they are appealing to policymakers