Letter from the Editor-in-Chief: Reverse knowledge transfers, culture clashes and going international

Abstract

Reverse Knowledge Transfers Multinational enterprises (MNEs) are, sina qua non, the world’s most efficient and prolific producers of knowledge (process and product technology, management skills, intangible assets). Once produced, exploiting that knowledge is a primary motivation for foreign direct investment (FDI) as MNEs go abroad to earn rents on their knowledge-based assets created at home. Through the process of FDI, MNEs transfer knowledge and capital to their foreign affiliates in host countries. This picture – MNEs as creators, exploiters and transferrors of knowledge – suggests a one-way transfer from the parent firm in the home country out to foreign affiliates in host countries. However, this picture has been getting old for some time and is now close to obsolete. Most MNEs are now horizontally and vertically integrated networks where knowledge flows in all directions within the network, including the parent firm. MNEs from emerging economies in Asia and Latin America now engage in ‘‘springboard FDI’’, going abroad to explore for knowledge and bringing it home. Metanationals – MNEs ‘‘born in the wrong place’’ – depend on knowledge learned abroad that is transferred back to the parent firm. As a result, knowledge-seeking FDI now commands as much attention from scholars as knowledge-exploiting FDI did in the 1980s. IB scholars have increasingly focused their attention on inbound or reverse knowledge transfers – antecedents, processes and consequences. However, research on knowledge transfers within and by MNEs faces a high hurdle: how does one measure the direction, size and impact of knowledge transfers? The most popular approach has been to track patent data citations. Patent data have provided a relatively easy ‘‘trail’’ for mapping intrafirm and interfirm knowledge flows, both planned transfers and spillovers. Most scholars in this area have used patent data, building on the seminal works of Patel and Pavitt (1991) and Journal of International Business Studies (2009) 40, 177–180 & 2009 Academy of International Business All rights reserved 0047-2506