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Interesting New Article of the Day: International diversification, subsidiary performance, and the mobility of knowledge resources

  • 1.  Interesting New Article of the Day: International diversification, subsidiary performance, and the mobility of knowledge resources

    Posted 08-17-2007 11:03

    IMD-Lers,
              I noticed this citation in the morning journal alerts and thought I'd share it.
    Cybercollegially,
    Charlie Wankel
    IMD-L List Director and Rabble-rouser
    http://facpub.stjohns.edu/~wankelc

    Strategic Management Journal
    Volume 28, Issue 10, 2007.

    Research Notes and Commentaries

    International diversification, subsidiary performance, and the mobility of knowledge resources

    Yulin Fang 1, Michael Wade 2 *, Andrew Delios 3, Paul W. Beamish 4

    1Faculty of Business, City <st1:placetype w:st="on">University</st1:placetype> of <st1:placename w:st="on">Hong Kong</st1:placename>, <st1:place w:st="on"><st1:city w:st="on">Hong Kong</st1:city>, <st1:country-region w:st="on">China</st1:country-region></st1:place>
    <st1:placename w:st="on">2Schulich</st1:placename> <st1:placetype w:st="on">School</st1:placetype> of Business, <st1:placename w:st="on">York</st1:placename> <st1:placetype w:st="on">University</st1:placetype>, <st1:place w:st="on"><st1:city w:st="on">Toronto</st1:city>, <st1:state w:st="on">Ontario</st1:state>, <st1:country-region w:st="on">Canada</st1:country-region></st1:place>
    3Department of Business Policy, National <st1:place w:st="on"><st1:city w:st="on">University of Singapore</st1:city>, <st1:country-region w:st="on">Singapore</st1:country-region></st1:place>
    4Ivey <st1:placename w:st="on">Business</st1:placename> <st1:placetype w:st="on">School</st1:placetype>, <st1:city w:st="on">University of Western</st1:city> <st1:state w:st="on">Ontario</st1:state>, <st1:place w:st="on"><st1:city w:st="on">London</st1:city>, <st1:state w:st="on">Ontario</st1:state>, <st1:country-region w:st="on">Canada</st1:country-region></st1:place>

    email: Michael Wade  mwade@schulich.yorku.ca  

    *Correspondence to Michael Wade, Schulich School of Business, York University, 4700 Keele Street, Toronto, Ontario, Canada, M3J 1P3.

    Keywords

     

    resource-based view • knowledge transfer • international diversification • subsidiary performance • Japanese foreign direct investment • intangible assets

     

    Abstract

     

    We examine the link between international diversification, organizational knowledge resources, and subsidiary performance. The success of international corporate diversification depends on a firm's capability to transfer knowledge to its subsidiaries, and how its local subsidiaries effectively utilize that knowledge. As knowledge resources are imperfectly mobile, a firm may find it difficult to transfer knowledge to its subsidiaries. In our analysis of 4964 Japanese subsidiaries over a 14-year period, we find that knowledge that is valuable, but not rare, positively affects subsidiary performance in the short term, but not the long term. In contrast, knowledge that is both valuable and rare affects subsidiary performance in the long term, but not the short term. Copyright © 2007 John Wiley & Sons, Ltd.

    Received: 6 October 2004; Revised: 8 December 2006