Innovation as a Dynamic Capability and Its Link to Performance in the Multinational Corporation: An Integrative Framework and Propositions for Research

Global integration of knowledge and innovation transfers in the internationalizing firm has inspired a growing literature in the international business literature. Several streams of studies examined interesting dimensions of this phenomenon, but extant literature is still weak in research that focuses on how knowledge sharing among the headquarters and subsidiaries of the multinational firm can boost performance. In this chapter, we present propositions for future research based on a review of the strands of literature that have addressed innovation in the multinational firm and explore how the firm can utilize innovation as a dynamic capability in driving positional advantage, and by extension improved firm performance.