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Based on the resource-based view and dynamic capabilities theory, this study aims to examine the complementarity between market orientations and launch proficiency as a driver of new product performance.

In this research, an on-site survey of Iranian, research and development- intensive, manufacturing firms was carried out to examine the proposed hypotheses. Based on the 179 workable survey responses, a covariance-based structural equation modeling was applied to verify the proposed theoretical model.

The empirical findings reveal that the effects of market orientation or launch proficiency alone are not significant while the complementarity between them significantly influences new product performance. These research outcomes suggest that this complementarity leads to a bidirectional co-specialization relationship in firms, promoting both market intelligence generation processes and product-launch capabilities, and therefore resulting in superior new product performance.

The current characterization of the resource-based theory signifies that strategic resources merely have potential value and actualizing this value needs complementary organizational capabilities. Furthermore, the literature notably lacks empirical findings supporting these complementarities. Therefore, the findings concerning the bidirectional co-specialization between market orientation and launch proficiency not only provide empirical support for the dynamic capabilities theory but also address recent research calls to identify and calibrate the importance of dynamic capabilities for leveraging market orientation on new product performance.

This study aims to focus on dual embeddedness as an important channel through which foreign subsidiaries access and share valuable and idiosyncratic knowledge within the multinational corporation (MNC). The authors examine the dual embeddedness challenges of foreign subsidiaries based in the context of Iran as a transitional market.

The final sample includes 144 active foreign subsidiaries in Iran from across a broad range of industries. A structured questionnaire was distributed to firms and structural equation modeling was adopted to analyze the results.

The findings reveal how building external embeddedness in an environment with potentially poor access to valuable knowledge, and risk of knowledge leakage impacts the subsidiary’s ability to subsequently transfer this knowledge within the MNC. The authors identify the significance of absorptive capacity as a way for the subsidiary to access knowledge from and share knowledge with firms in the local market.

Departing from existing work on subsidiary embeddedness in developed markets, the authors reveal how competence creating subsidiaries manage dual embeddedness and knowledge transfer in transition economies that are low in knowledge stocks. The authors unpack how subsidiary absorptive capacity enables access to local knowledge in a transitional market and increases reverse knowledge transfer in the MNC. In doing so, the authors answer calls for work on the dynamic and complementary relationships that exists between subsidiary dual embeddedness, absorptive capacity and knowledge sourcing in less open markets. Focusing on Iran as a transitional economy, this study provides greater contextual nuance to the extant literature on subsidiary dual embeddedness.