The Importance of Headquarters Role in Subsidiary Innovation in EMNCs: A Case Study of Lynk & Co

Abstract: One of emerging-market multinational companies’ main motives is to seek strategic assets, such as technology, from their subsidiaries in order to enhance their innovation competence. Subsidiary innovation development is key to EMNCs achieving this objective and has therefore become increasingly important for EMNCs. This thesis focuses on subsidiary innovation in emerging-market multinational companies and explores how it is influenced by headquarters administrative and entrepreneurial roles. A single in-depth case study of a Chinese multinational company–Geely–and its subsidiary, Lynk & Co, is used to understand the importance of the headquarters role in subsidiary innovation. Our findings indicate that the headquarters takes advantage of the administrative role and the entrepreneurial role to implement four strategies in the subsidiary: decentralised control, socialisation, resource sharing and allocation, and headquarters attention, which enhance subsidiary innovation. By emphasizing the importance of headquarters role in subsidiary innovation in EMNCs, this study contributes to the literature on EMNCs, subsidiary innovation and headquarters role and also enriches insights into the view of parenting advantage.