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The multinational (MNC) is well established as an arena primed for the creation and sharing of innovations. Within this arena, the creation of innovations is borne from leveraging the unique knowledge and opportunities of its globally dispersed subsidiaries.

The recent emergence of more transactional and cost focused approaches to the allocation of organisational activities within the MNC, under what is termed a ‘global factory’ structure, now challenges this dominant view whilst also providing a good vantage point to look back at research to date and to project the future impact of these changes. In the absence of research which hybridises recent literature on innovation with current insights from the international business domain this review paper contributes to our understanding of the impact of this shift by identifying the implications of narrower subsidiary roles, increased monitoring and constraints on combinative …