Research and development resilience of foreign MNE subsidiaries during the Great Recession

Research Summary This study examines the research and development (R&D) resilience of subsidiaries of foreign multinational enterprises (MNEs) during the Great Recession, defined as the ability to sustain R&D investment amid economic disruption. Building on studies in global strategy and international business, we argue that R&D resilience is shaped by corporate‐based advantages rooted in MNE affiliation and parent‐level resource access, as well as by subsidiary‐based capabilities developed through external cooperation and exploratory activity in response to liabilities of foreignness. Analysis of a sample of subsidiaries from 2005 to 2013 indicates that corporate‐based advantages and subsidiary‐based capabilities may function as alternatives in sustaining R&D investment during periods of disruption. These findings enhance our understanding of subsidiary resilience and highlight the contingent nature of multinationality advantages during economic disruption. Managerial Summary This study investigates the factors that enable certain foreign multinational enterprise (MNE) subsidiaries to sustain research and development (R&D) investment during periods of economic disruption. The findings indicate that resilience is determined by two primary sources of advantage: corporate‐based advantages derived from multinational affiliation, which provide access to parent‐level resources that buffer innovation from local market shocks, and subsidiary‐based capabilities developed through external cooperation and exploratory activities, which generate locally embedded knowledge stocks essential for protecting R&D under adverse conditions. MNE leaders are advised to prioritize support for subsidiaries that are strategically important but face constraints in accessing these advantages. For subsidiary managers, building R&D resilience requires proactive investment in cooperative partnerships, exploratory initiatives, and enhancing visibility within the intra‐firm network prior to the disruption.