Multinational enterprises, local linkages and resource transfer: the building blocks of radical innovation in Finland

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School of Economics | Master's thesis
International Business
Kansainvälinen liiketoiminta
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Objective of the Research The purpose of this research is to examine inter-company linkages between multinational enterprises (MNEs) and locally based companies in Finland in terms of linkage quality, quantity and type. In addition, firm-level determinants of MNEs’ ownership and cluster membership as well as locally-based companies’ absorptive capacity are analyzed in order to further explore the nature of inter-company linkages in Finland. Inter-company linkages are becoming increasingly important because knowledge required for innovation is seldom found internally any longer. Inter-company linkages are essential for creating radical innovations and sustaining the competitiveness of Finnish companies in the near future. Methodology This thesis used a quantitative approach for collecting and analyzing data. The data was collected as part of a GlobeConnect research project with a questionnaire. The questionnaire was sent to the 500 largest companies based on turnover in Finland and 81 responses were received. Companies with only domestic operations were excluded from this thesis in order to ensure that the sample group is coherent in terms of size and level if internationalization. Therefore 59 respondents were analyzed in this thesis. Findings and Conclusions The main findings show that the respondent MNEs are more likely to share R&D and marketing resources with their local buyers while management and HR resources are more likely shared with MNEs’ local suppliers. The results also indicate that R&D resources are more likely to be shared via inter-company linkages in Finland than management, marketing or HR resources. In general, MNEs receive more resources from locally-based companies than vice versa. Therefore it is argued that local companies are not absorbing the full potential of resources available at MNEs.
MNEs, inter-company linkages, resource transfer, clusters, radical innovation
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