International Collaboration and Innovation: Evidence from a Leading Chinese Multinational Enterprise

<p>This paper investigates the impact of international collaboration and its characteristics on the quality of innovation by multinational enterprises (MNEs) in emerging markets. Using a unique dataset of 1428 international and comparable domestic collaboration projects over the 2010-2016 period, it finds that while international innovation collaborations are associated with high innovation quality, cultural distance has a negative effect on the collaboration outcomes. Moreover, locations close to the focal firm’s overseas R&D centres and greater expenditure budgets show a significant moderating effect in overcoming the cultural barriers. Using RBV and dynamic capabilities theories, we investigated how firms from emerging markets can acquire these two crucial requisites to innovation. Characteristics of partners and intellectual property arrangements are also found to have positive impact on the quality of innovations.</p>