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In this paper, we investigate the evolution of multinational corporation ( MNC ) research and development ( R for there are MNC subsidiaries that operate and innovate within and outside organizational boundaries, and have strong links with firms within and outside of B angalore cluster. The globalized nature of the cluster helps us infer the evolution of innovation networks by taking a knowledge flow perspective. We identify four distinct phases based on where and how knowledge flows. We find that the innovation networks of these MNC subsidiaries in emerging economies first develop as hierarchical networks and then extend to the local markets. Within the first part, the networks start with a non‐local nature (phase A ) and get embedded into local networks (phase B and phase C ), finally developing into non‐local (phase D ) market ties that enable MNC headquarters to source innovation from the host country. In an emerging economy context, clusters can serve as a springboard by providing a local environment that can help overcome institutional voids.
Karna et al. (Mon,) studied this question.