Industrial influences on R&D transfer to China

Abstract

PurposeThe purpose of this paper is to open a new research frontier concerning industry factors influencing R&D transfer to emerging markets within Western multinational companies (MNCs).Design/methodology/approachThe paper presents a framework based on knowledge transfer, knowledge creation, and innovation theory, which is illustrated in two cases from globally leading MNCs from different industries and technological fields which have established R&D units in China. It addresses the issue of industrial influences on R&D transfer to emerging markets, and the importance of complementary assets for innovation performance.FindingsThe framework and empirical research suggest that R&D transfer to new R&D units in emerging markets is less challenging for companies within industries characterized by slow technological development. This is due to dynamics, which result in codification and diffusion of technical knowledge, whereby it is easier to transfer and absorb. When the transformation from exploration to exploitation of knowledge is simple rather than complex within an industry, R&D transfer is less challenging. Leverage of local complementary assets nurtures reverse R&D knowledge transfer – positively impacting innovation performance.Originality/valueThe paper addresses the gap in knowledge transfer theory concerning industrial R&D transfer differences. The paper provides a framework for innovation related industrial contingencies on R&D transfer concerning emerging markets, and it advances the argument that complementary assets are important for R&D in emerging markets. Implications for management in China are outlined. The term captive knowledge transfer is coined.