The Dispersed Multinational: Does Connectedness Across Spatial Dimensions Lead to Broader Technological Search?

The multinational enterprise (MNE) is the superior form of organization to play arbitrageur of country differences, particularly with respect to high knowledge activities. To this end, extant IB literature has devoted significant efforts to the transfer of knowledge across countries via local embeddedness. However, in a modern business environment characterized by dispersed value chain activities and falling spatial transaction costs, collaborative innovation relationships may be far more complex. In this paper, we argue that the connectedness of inventor networks – rather than knowledge spillovers – may transcend requirements of local embeddedness and serve as a crucial source of new ideas and exploration into new technologies. Further, we posit that these collaborations stem out of locations at the subnational level, such as cities, and fall along the somewhat orthogonal dimensions of foreign and domestic connections. Finally, we argue that the operational footprint of the firm serves as a positive moderator on the impact of connectedness on technological exploration.