Headquarters‐Subsidiary Knowledge Strategies at the Cluster Level

How do multinational enterprises (MNEs) transfer knowledge over space between clusters and between other locations? To explore this question, we construct a typology of four MNE knowledge strategies (replicating, scouting, connecting, and integrating) and examine the spatial, industrial, and leadership conditions of each. By examining 49 headquarter-subsidiary linkages between Canada and China through detailed interviews, we find that replicating strategies occur in cluster-to-non-cluster contexts or industries with a knowledge gap between the two countries, whereas scouting strategies are typical in non-cluster-to-cluster investments. Connecting and integrating strategies are focused on cluster-to-cluster contexts. We also find that while connecting occurs in fields where knowledge is locally bounded, integrating dominates where this is not the case. Finally, scouting and integrating strategies are associated with home nationals as subsidiary leaders.