Headquarters-Subsidiary Knowledge Strategies at the Cluster Level

Abstract

This paper examines how multinational enterprises (MNEs) leverage knowledge across clusters. Based on the geographical sources and the contextuality of knowledge, we construct a typology of four MNE knowledge strategies across space: replicating, scouting, connecting, and integrating, and take into consideration their spatial, industrial, and leadership contexts. A fuzzy-set qualitative comparative analysis (fsQCA) of 49 pairs of headquarters-subsidiary linkages between Canada and China suggests that replicating strategies occur in cluster-to-non-cluster contexts or in fields with a knowledge gap between the two countries, whereas scouting strategies are typical in non-cluster-to-cluster investments. Connecting and integrating strategies are focused on cluster-to-cluster contexts. We also find that while connecting occurs in fields where knowledge is locally bounded, integrating takes place in non-locally bounded contexts. Finally, scouting and integrating strategies are associated with home nationals as subsidiary leaders.