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Foreign multinational enterprises and eco-innovation in local firms: the effect of imitation

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Abstract

This paper investigates multinational enterprises (MNEs) as a potential referent for local firms making decisions on eco-innovation. By analyzing Korean innovation survey and patent data, we find local firms’ eco-innovation scope converges with that of the most profitable foreign MNEs within an industry, i.e., profitability is considered a reliable signal for imitation. The imitation tendency changes contingent on previous eco-innovation experience and innovation networks in other local firms. The degree of imitation is then negatively associated with local firms’ eco-innovation outputs. This study shows how local firms can use social proof from selected foreign MNEs to supplement their sense-making in a non-routine environment.

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Acknowledgements

This work was supported by the British Academy [Grant Number SG153087].

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  1. The York Management School, University of York, Freboys Lane, Heslington East, York, YO10 5GD, UK

    Yoo Jung Ha

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Ha, Y.J. Foreign multinational enterprises and eco-innovation in local firms: the effect of imitation. Asian Bus Manage 20, 488–517 (2021). https://doi.org/10.1057/s41291-020-00142-y

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