Title: Reverse innovation as an inducer of centres of excellence in foreign subsidiaries of emerging markets

Authors: Felipe Mendes Borini; Sidney Costa; Maitê Alves Bezerra; Moacir de Miranda Oliveira Junior

Addresses: Department of International Business Studies, Escola Superior de Propaganda e Marketing (ESPM-SP), São Paulo – SP, R. Álvaro Alvim, 123, Vila Mariana – ZipCode: 04018-010, Brazil ' Department of Business Studies, University of São Paulo, São Paulo – SP, Av. Prof. Luciano Gualberto, 908, Cidade Universitária – ZipCode: 05508-010, Brazil ' Department of International Business Studies, Escola Superior de Propaganda e Marketing (ESPM-SP), São Paulo – SP, R. Álvaro Alvim, 123, Vila Mariana – ZipCode: 04018-010, Brazil ' Department of Business Studies, University of São Paulo, São Paulo – SP, Av. Prof. Luciano Gualberto, 908, Cidade Universitária – ZipCode: 05508-010, Brazil

Abstract: This paper aims to understand how autonomy and integration influence reverse innovation in foreign subsidiaries in Brazil. Furthermore, this paper supports the idea that reverse innovation is associated with the formation of centres of excellence in subsidiaries in emerging markets and that autonomy and integration are relevant for centres of excellence, albeit indirectly, i.e., intermediated by reverse innovation. A survey was applied to 172 foreign subsidiaries in Brazil. The results confirm the association between autonomy and integration in the development of reverse innovation and the association of the latter with centres of excellence. Results also indicate that the rationale of centres of excellence in emerging markets is different from developed countries, demonstrating the importance of the structure of the multinational corporation to the occurrence of reverse innovation. The finds indicate managerial implication in terms of adjusting the structure of the relationship between headquarters and subsidiaries in favour of reverse innovation.

Keywords: reverse innovation; centres of excellence; autonomy; integration; foreign subsidiaries; emerging markets; international business; HQ-subsidiary relationship; MNC headquarters; Brazil; organisational structure; multinational corporations; MNCs.

DOI: 10.1504/IJBEM.2014.060490

International Journal of Business and Emerging Markets, 2014 Vol.6 No.2, pp.163 - 182

Available online: 17 Apr 2014

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