Transnational flows of knowledge in multinational corporations: R&D co-practice as an integrating force

This dissertation examines transnational flows of knowledge within multinational companies (MNCs) in the context of technological innovation. I define transnational flows of knowledge as the transfer and utilization of knowledge between organizational subunits located in different countries. The overarching research question addressed in this dissertation is: to what extent and under what conditions do transnational flows of knowledge occur within multinational firms? The research seeks to identify—and investigate empirically—a set of factors that facilitate and impede transnational flows of knowledge within MNCs.; The main argument of the research is that, although there are many attributes of multinational firms that push against the integration of knowledge across organizational subunits (referred to as centrifugal forces), R&D co-practice—in simple terms, joint technological activity between units—can be an important integrating or centripetal force that firms utilize to facilitate the flows of knowledge across geographically dispersed subunits. Drawing on the broader literature on innovation in organizations, I argue that R&D co-practice operates through two main mechanisms to increase transnational flows of knowledge: absorptive capacity and social capital.; The dissertation examines this argument in the context of innovation activity by a sample of major multinational firms in two broad sectors, pharmaceuticals and automotives. This research utilizes a novel dataset composed of information drawn from U.S. patent documents. The empirical results provided strong support for the role of R&D co-practice as an integrating force for knowledge flows in MNCs. The results also suggest that foreign subunits, in particular greenfield subunits, are increasingly evolving into important sources of new knowledge and learning for multinational firms. There are also interesting findings regarding the effect of structural characteristics of MNCs on transnational flows of knowledge.