How Does Time Synchronization Affect Innovation Quality?

Abstract

How location choice influences innovation in MNCs has been the subject of controversy, and the examination of geographic concentration or dispersion is particularly insufficient. The question is, how will the decentralization or centralization of MNCs affect the communication and management of information among employees. To address this deficiency, this study introduces the concept of time synchronization and attempts to examine the relationship between MNCs location choice and corporate innovation quality from a new perspective. By gathering data from the Chinese internationalized firms, we found that time synchronization between parents and subsidiaries is positively associated with the innovation quality of parent firms, and the degree of digitization strengthens this positive relationship. This study underscores the crucial role of overlapping work time for employee interactions between parents and subsidiaries to acquire information in comprehending and absorbing overseas knowledge to improve the innovation quality of parent firms.