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Inertia and change in multinational enterprise subsidiary capabilities: an evolutionary economic geography framework

Phelps, NA; Fuller, C; (2015) Inertia and change in multinational enterprise subsidiary capabilities: an evolutionary economic geography framework. Journal of Economic Geography 10.1093/jeg/lbv002. Green open access

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Abstract

In this article we argue for a process-centred use of the dynamic capabilities-based view of evolution in multinational enterprise (MNE) subsidiary capabilities. In particular, we consider changes in the scale, scope and specialisation of resources and capabilities at subsidiaries over time by drawing on Dodgshon’s (1998) study of change in empires and societal systems. Following Dodgshon, we classify changes at MNE subsidiaries into processes of (i) expansion or contraction, (ii) reduction, (iii) involution, (iv) aggregation upwards and outwards, (v) accretion and (vi) replacement/substitution, illustrating this framework with reference to the extant literature. We suggest that the potential of this framework lies, in part, in its embrace of both change and inertia within MNEs and at their subsidiaries. It is important to consider both change and inertia if we are to understand the implications of MNE subsidiary evolution national and subnational economic development policy.

Type: Article
Title: Inertia and change in multinational enterprise subsidiary capabilities: an evolutionary economic geography framework
Open access status: An open access version is available from UCL Discovery
DOI: 10.1093/jeg/lbv002
Publisher version: http://dx.doi.org/10.1093/jeg/lbv002
Language: English
Additional information: © The Author (2015). Published by Oxford University Press. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited.
Keywords: Multinationals enterprises; dynamic capabilities; subsidiary evolution; territorial economic development;
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > The Bartlett School of Planning
URI: https://discovery.ucl.ac.uk/id/eprint/1470807
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