Knowledge Creation in IJVs: The Mediating Role of Formal and Informal Communication

Abstract

This study explores the path of knowledge creation in an international joint venture (IJV) by examining the distinctive mediating role of formal and informal communication. We present that an organizational learning platform, which includes commitment, cultural distance, and cultural alignment, is a crucial determinant for communication between partner firms that leads to new knowledge creation in IJVs. Using survey data collected from 136 Korean parent firms of IJVs, we find that an organizational learning platform of IJVs largely influences formal and informal communication between partners. Whereas commitment to partners and cultural distance between partners promote only formal communication, cultural alignment enhances both formal and informal communication. We also find that the impact of formal communication on IJV knowledge creation is greater than that of informal communication. Our findings provide important implications for managers of both IJVs and parent firms that aim to create new knowledge through IJVs.