Knowledge-based resources as determinants of MNC structure: tests of an integrative model

This paper develops and tests a theoretical model of the structural choice by multinational corporations (MNCs). The model draws on three research streams: the contingency framework, integration–responsiveness (IR) framework, and organizational economics. Insights from the three streams of work are integrated into a theory of optimal structural choice under the assumption that both the MNC and its managers make decisions on the basis of their self-interests. An important feature of the model is its exposition of knowledge-based resources as a key determinant of MNC structure. The predictions of the model are tested on a sample of 101 MNCs using a multivariate regression approach. The results confirm the role of knowledge-based resources in influencing MNC structures.