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

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JournalAsian business & management
DateAccepted/In press - 15 Oct 2020
DateE-pub ahead of print (current) - 2 Nov 2020
Early online date2/11/20
Original languageEnglish

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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    Research areas

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

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