The role of networks, competencies, and IT advancement in innovation performance of foreign-owned subsidiaries

Abstract

While networks, competencies, and information technology are key factors to drive innovation performance, they are frequently investigated on a separate basis. Further, their interplay and contingency have hitherto received scant attention. We propose and empirically test a framework based on the configurational perspective encompassing prevailing network theory and the competence-based view of the firm. Survey data from 235 foreign-owned subsidiaries located in Singapore and Thailand was analyzed using fuzzy set qualitative comparative analysis technique. We found that information technology advancement and high overall competence levels are important asset bundles for the occurrence of high innovation performance outcomes. However, we also determined that it is important for some subsidiaries to maintain strong interfirm network relationships for innovation performance, especially in combination with higher information technology advancement. In addition, the role of network strength as a cause of innovation performance seems also dependent on the business environment and practices of the host country. In addition, we also show that innovation performance is an important factor facilitating market performance.