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

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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.
Original languageEnglish
Pages (from-to)488–517
JournalAsian business & management
Early online date2 Nov 2020
Publication statusPublished - 1 Sept 2021

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  • MNE
  • Eco-innovation
  • Imitation
  • Social proof
  • Non-routine environment

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