From Knowledge Sourcing to Value Creation: Analysing the Key Drivers of Global Innovation by MNEs

This study examines how multinational enterprises (MNEs) internalize digital and innovation capabilities to sustain resilience amid geopolitical disruptions that undermine cross-border predictability. We employ an integrated theoretical lens of Knowledge-Based View (KBV) and Global Innovation Networks (GIN). Building on the reconceptualization of MNEs as knowledge-integrating entities, we argue that internalization functions as a dynamic governance mechanism that transcends transaction cost minimization. It enables MNEs to safeguard critical knowledge assets, promote organizational learning, and adapt to technological processes to sustain competitiveness under conditions of “global disorder.” Employing an abductive research design and drawing on rich qualitative interview data from senior executives of eight large MNEs, complemented by insights from the strategic management literature, the study identifies three interrelated mechanisms that facilitate the internalization of digital and innovation capabilities.