Internal embeddedness and innovation performance of Multilatinas: roles of reverse knowledge transfer and subsidiary autonomy delegation

Purpose This study examines the innovation performance of Multilatinas. More specifically, the interplay between internal embeddedness, reverse knowledge transfer (RKT) and subsidiary autonomy delegation toward innovation performance. Design/methodology/approach We draw upon network theory to bring RKT as a mediator in the link between internal embeddedness and innovation performance. In addition, we propose the mediation effect is moderated by subsidiary autonomy delegation. Partial least squares structural equation modeling (SEM) is used to analyze a sample of 92 Multilatinas. Findings Our results indicate that RKT is a partial mediator between internal embeddedness and innovation performance. In addition, delegating autonomy towards subsidiaries located in developed markets is a key strategic mechanism to strengthen the performance effects of internal embeddedness and knowledge transfer activities. Originality/value This study advances the multilatinas literature by examining how internationalization activities in developed markets enable headquarters to compete in global innovation sectors. Additionally, this study advances the broader emerging market multinational enterprise (EMNE) literature by examining the roles of RKT and subsidiary autonomy in the innovation process.