The evolution of innovation capability in multinational enterprise subsidiaries: Dual network embeddedness and the divergence of subsidiary specialisation in Taiwan

This paper examines how innovation-related capabilities for production, design and marketing develop at the subsidiary level within multinational enterprises (MNEs). We focus on how subsidiary autonomy and changing opportunities to access external (host country) sources of capability contribute to the accumulation of specialist capabilities in five Taiwan-based MNE subsidiaries in the semiconductor industry. Longitudinal analysis shows how the accumulation process is subject to discontinuities, as functional divisions are (re)opened and closed during the lifetime of the subsidiary. A composite set of innovation output measures also shows significant variations in within-function levels of capability across our sample. We conclude that subsidiary specialisation and unique subsidiary-specific advantages have evolved in a way that is strongly influenced by the above factors.     

An international comparison of sectoral knowledge bases: persistence and integration in the pharmaceutical industry

This paper builds upon and extends existing studies of scientific and technological specialisation by proposing an analytical framework to compare sectoral knowledge bases across countries. It develops the concepts of knowledge persistence and knowledge integration as the relevant dimensions along which knowledge bases can be compared. Persistence is studied by analysing the evolution of specialisation over time. It hints at the cumulative, path dependent nature of learning processes. Integration is studied by analysing the evolution of specialisation across different typologies of research. It hints at the complex, non-linear interdependencies that link the scientific and technological domains. On the strength of an original database encompassing 630,000 peer-reviewed papers published between 1989 and 1996 in 11 chemistry and pharmacology-related fields across three types of research (i.e. basic, applied and development), it is argued that countries with high degrees of both persistence and integration (e.g. the US in pharmacology) are the most likely sources of useful research results for EU firms’ innovative efforts in the pharmaceutical sector. Also, some doubts are cast on the existence of a European paradox in pharmaceuticals.