Navigating Institutional Distances for Innovation: The Strategic Approach of Valvitalia Spa

This study explores how multinational enterprises (MNEs) navigate institutional distances to enhance innovation performance, focusing on the case of Valvitalia Spa, an Italian manufacturing MNE. Drawing on Institutional Theory, the research examines how variations in intellectual property (IP) regimes and local institutional environments influence firms’ R&D location strategies and innovation outcomes. Using a data triangulation approach that combines patent analysis from the Orbit Questel database, company reports, and interviews with managers, the study investigates Valvitalia’s global innovation network, particularly the pivotal role of its Suzhou subsidiary in China. Despite operating in a country with a relatively weak IP enforcement system, Valvitalia’s decentralized R&D strategy, supported by strong local partnerships and adaptive management, has fostered significant technological advancement. The findings reveal that the company effectively mitigates institutional challenges by leveraging local innovation ecosystems while maintaining strategic coordination from headquarters. This hybrid model underscores the importance of institutional adaptability and relational embeddedness in sustaining global innovation. The research contributes to the literature on international business strategy by highlighting how MNEs can balance global integration with local responsiveness in institutionally diverse environments.