MNE competence-creating subsidiary mandates

John Cantwell, Ram Mudambi

Research output: Contribution to journalReview articlepeer-review

896 Scopus citations


The determinants of R&D intensity differ between subsidiaries in a multinational enterprise (MNE). Previous literature suggests that whether a subsidiary achieves a competence-creating output mandate depends on the qualities of its location. R&D strategies in competence-creating subsidiaries are supply-driven while those in purely competence-exploiting subsidiaries are demand-driven. Using data on U.K. subsidiaries of non-U.K. MNEs, we find that the level of subsidiary R&D depends on MNE group-level and subsidiary-level characteristics as well as locational factors. The R&D of mandated subsidiaries rises with acquisition, but for non-mandated subsidiaries R&D falls upon acquisition. MNEs that grow through acquisition have more inter-subsidiary R&D diversity.

Original languageEnglish (US)
Pages (from-to)1109-1128
Number of pages20
JournalStrategic Management Journal
Issue number12
StatePublished - Dec 2005

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Strategy and Management


  • Acquisition
  • Competence
  • MNEs
  • Mandates
  • R&D
  • Subsidiary entrepreneurship


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