Knowledge flows and the modelling of the multinational enterprise
- PDF / 249,030 Bytes
- 19 Pages / 595 x 794 pts Page_size
- 14 Downloads / 254 Views
& 2007 Academy of International Business All rights reserved 0047-2506 $30.00 www.jibs.net
Knowledge flows and the modelling of the multinational enterprise
Nicole Adler and Niron Hashai Jerusalem School of Business Administration, The Hebrew University, Israel Correspondence: N Hashai, Jerusalem School of Business Administration, The Hebrew University, Mt Scopus, Jerusalem 91905, Israel. Tel: þ 972 (0)2 5883110; Fax: þ 972 (0)2 5881341; E-mail: [email protected]
Abstract This research develops a location–allocation, mixed integer linear model that simultaneously evaluates a substantial number of multinational enterprise (MNE) location and control configurations to yield an optimal network, considering R&D, production and marketing facilities, produced in-house and/ or outsourced. The model places special emphasis on the role of intra-firm, inter-firm and extra-firm knowledge flows in addressing cost minimisation considerations of MNEs. A simulation analysis is undertaken to evaluate potential solutions from such a framework and to analyse their consistency with theoretical expectations. Journal of International Business Studies (2007) 38, 639–657. doi:10.1057/palgrave.jibs.8400284 Keywords: multinational enterprise; modelling; optimisation; knowledge flow; internationalisation; internalisation
Received: 17 February 2005 Revised: 9 May 2006 Accepted: 10 November 2006 Online publication date: 7 June 2007
Introduction The significance of knowledge flows in explaining the emergence of multinational enterprises (MNEs) has been long acknowledged by international business scholars. This is evident from the central role that knowledge flows play in various theories explaining the MNE phenomenon. The prime explanation for the emergence of MNEs, according to the internalisation school, is often argued to be the failure of external markets to transfer proprietary knowledge, which in turn motivates firms to establish or acquire wholly owned foreign subsidiaries (Buckley and Casson, 1976; Rugman, 1981, 1986; Dunning, 1988; Hennart, 1993). Gupta and Govindarajan (1994, 2000); Kogut and Zander (1993, 1995) go a step further and position knowledge flows as the ultimate reason for the emergence of MNEs. Such scholars conceive the MNE as the most efficient mechanism for the transfer of knowledge across borders, claiming that MNEs are ‘social communities’ that are better able to transfer knowledge that is simultaneously complex, non-codifiable and non-teachable (Kogut and Zander, 1992, 1993). This view asserts that it is not necessarily a failure of the market for knowledge that leads to the emergence of the MNE, but rather MNEs emerge because of their relative efficiency in transferring knowledge compared with firms choosing alternative foreign market entry modes (Kogut and Zander, 1993; Madhok, 1997; Martin and Salomon, 2003). Likewise the concept of the transnational corporation put forward by Bartlett and Ghoshal (1989) emphasises the importance of knowledge transfer
Modelling the MNE
Nicole Adler and Niron Hashai
640
be
Data Loading...
