How Geopolitical Tensions Influence the Innovation of MNC’s Foreign Subsidiaries?

This study explores the influence of political tensions on foreign R&D subsidiaries' innovation in host countries, using Chinese firms as a sample. It reveals that rising political strife between home and host countries reduces subsidiary innovation. The presence of local same-parent affiliates worsens, while local innovation partners alleviate, this negative effect. The findings highlight the adverse consequences of political discord on multinational enterprise subsidiary innovation and the conditions affecting this impact.