The Coevolution of International Scope and Technological Knowledge

2019.02.16
Event

Speaker: Prof. Andrew Delios (National University of Singapore)

Topic:	The Coevolution of International Scope and Technological Knowledge
Time&Date:	15:00-16:15 pm, 2019/2/22 (Friday)
Venue:	Room 619, Teaching A
Speaker:	Prof. Andrew Delios (National University of Singapore)
Abstract:	Two sets of relationships permeate research on technological knowledge and international scope for multinational firms: technological knowledge stimulates international growth; and internationalization leads to technological enhancements. In this study, we depart from the debate about which precedes which to advance a novel argument: technological knowledge and international scope are both outcomes of a set of interdependent, long-term strategic decisions aimed at optimizing the complementary effects of both dimensions on firm performance. We develop this argument by creating a model of the dynamic process in which both technological knowledge and international scope coevolve. This dynamic optimization model, whose predictions we also test using a large longitudinal sample of Japanese multinational firms, points to the existence of four coevolution trajectories: (1) a trajectory in which increases in the levels of technological knowledge and international scope occur simultaneously and interdependently; (2) a trajectory of simultaneous reductions in both dimensions; (3) a trajectory where technologically rich but domestically oriented firms reduce their technological expansion while expanding internationally; and (4) a trajectory where highly internationalized, but technologically lagging, firms reduce their international expansion while advancing technologically. Our findings thus align with and help to consolidate different strands of internationalization theories. This approach to conceptualizing the simultaneous development of important strategic decisions moves away from a debate about cause and effect between sets of strategic decisions, to emphasize the importance of considering how strategies and structures within multinational firms co-evolve.