Geographies of Knowledge Sourcing and the Complexity of Knowledge in Multilocational Firms

The rise of the knowledge economy has placed innovation at the center of models of competitive advantage. Access to more valuable forms of knowledge remains contested as the geography of its production is uneven and as some knowledge assets are relatively immobile. Within this fractured knowledge landscape multilocational firms have clear advantages. They can exploit numerous localized pools of knowledge, they can shape the character of knowledge development in different places, and they have some control over who can tap local knowledge assets. Surprisingly, we still have little detailed knowledge of the technologies developed by multilocational firms across the sites where they are active. We augment the literature on multiunit firms on three fronts. First, we make use of the rich, technological information in patent data to show that multilocational firms operating research and development (R&D) units across US metropolitan areas produce different kinds of technological knowledge over space. Second, we provide quantitative evidence of geographic knowledge sourcing by linking the technologies produced within the R&D units of these firms to the knowledge stocks generated within the cities where they are located. Third, we report that as the number of R&D units within multilocational firms increase, so, up to a limit, the complexity of the knowledge those firms generate also increases. We show that these complexity gains are linked to the volume of knowledge sourced from local partners and to the integration of knowledge across units of the multilocational firm.