On the Geography of Knowledge Sourcing: a Typology of Mne Subsidiaries

The competence-exploiting subsidiaries of MNEs extend and adapt for local conditions competencies that were previously developed by their parent companies. In contrast, competence-creating subsidiaries broaden the profiles of competence of their corporate groups. Competence-creating subsidiaries are likelier to source knowledge from their own local environment. We distinguish between ‘sticky’ technologies whose development is highly location-specific, and ‘slippery’ technologies that draw upon knowledge from a wide geographical span. We find that competence-creating subsidiaries are especially highly focused on the development of sticky technologies, and that these rely on a relatively autonomous (intra-sectoral) learning and a high degree of sectoral focus.