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RESEARCH PAPER
Innovation Performance of Foreign Subsidiaries in Post-Transition Economy: Evidence from Poland
1
Collegium of World Economy, SGH Warsaw School of Economics, Poland
Submission date: 2021-10-22
Final revision date: 2022-02-09
Acceptance date: 2022-07-01
Publication date: 2022-09-30
Corresponding author
GNPJE 2022;311(3):46-66
KEYWORDS
JEL CLASSIFICATION CODES
ABSTRACT
The host country environment is an important source of knowledge for multinational
enterprises (MNEs). The resources and competencies of MNEs’ foreign
subsidiaries (FS) as well as internal and external relationships are perceived to be
critically important for their performance. This study intends to fill a cognitive
gap in the understanding of factors influencing the innovation performance of FS
established in Poland. FS innovation performance is explained by their resourcebased
specific advantages, internal embeddedness in the corporate network, external
embeddedness, and by interactions between their systemic power and autonomy.
The analysis is based on a 2018 survey of 436 manufacturing FS in Poland.
The ordinary least squares (OLS) regression model was applied, along with three
quantile regression equations to provide additional layers of detail. We observed
a positive influence of FS’ own assets on innovation performance, especially if
coupled with their deep internal embeddedness. The study also found a positive
influence of internal embeddedness on innovation performance enhanced for high/
medium-high-tech firms if coinciding with strong resource-based specific advantages.
Another finding was that the external embeddedness of FS had a positive
effect on their innovation performance. Besides, the positive influence of systemic
power on innovation performance was only revealed for high/medium-high-tech
FS, while the subsidiaries’ autonomy showed no significant influence on their
innovation performance.
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