Quo Vadis? The Entry into New Technologies in Advanced Foreign Subsidiaries of the Multinational Enterprise

In an article that marked the beginning of extensive research on foreign technological activity in the multinational enterprise (MNE), Robert Ronstadt (1978) suggested an evolutionary pattern by which initial R&D investments in foreign subsidiaries expand into significant capabilities in developing new and improved products for foreign or even global markets. The prediction was the emergence of an increasing number of advanced foreign research and development subsidiaries in the MNE, capable of making substantial contributions to the technological and strategic renewal of the entire corporation. Now, some three decades later, it appears that Ronstadt’s overall prediction was essentially correct. Research has confirmed an increase in the foreign part of technological capabilities in many MNEs, and accomplished subsidiaries with advanced technological capabilities have become common in the large and well-established MNE (Cantwell, 1989; Cantwell & Mudambi, 2005; Dunning, 1994; Reger, 2002).