The Influence of Multiple Knowledge Networks on Innovation in Foreign Operations

Abstract

Although extant literature has long argued that firm embeddedness within knowledge networks increases innovation, we know much less about how interactions across multiple knowledge networks jointly influence learning and innovation outcomes within firms. This paper contributes to our understanding of global innovation in multinational corporations (MNCs) by exploring how competing tensions across parent, host-country, and third-country knowledge networks in terms of knowledge domain diversity and dominance, organizational bias, and knowledge relevance perceptions influence innovation outcomes. Empirical results from a comprehensive panel of U.S. MNCs reveal different “preferred” combinations of high and low embeddedness across parent, host-country, and third-country knowledge networks for incremental versus radical innovation outcomes, reflecting how competing tensions across knowledge networks can limit or enhance knowledge search for diverse knowledge and influence innovation outcomes in the foreign operations of MNCs.

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