International collaboration and innovation: Evidence from a leading Chinese multinational enterprise

This paper investigates the impact of international collaboration and its characteristics on the quality of the innovation of multinational enterprises (MNEs) in emerging markets. Using a unique dataset of 1428 international and comparable domestic collaboration projects over the 2010-2016 period, it finds that while international innovation collaborations are associated with high innovation quality, cultural distance has a negative effect on collaboration outcomes. Moreover, proximity to the focal firm's overseas R&D centres and the size of expenditure budgets play significant moderating roles in overcoming cultural barriers. Based on the RBV and dynamic capabilities theory, we investigate how firms from emerging markets can acquire these two crucial requisites for innovation. The characteristics of partners and intellectual property (IP) arrangements are also found to have a significant impact on the quality of innovations.