Abstract
Cross-border flow of knowledge is fraught with many challenges. The complexity associated with the organization of multinational corporations (MNCs) and the information asymmetry in foreign locations pose particular challenges to knowledge flow. Yet, effective transfer of knowledge is critical for the survival and performance of MNCs. Based on an extensive review of the literature, we present a comprehensive framework to understand the difficulties in the smooth flow of knowledge in MNCs. We argue that knowledge flow in MNCs is affected by the nature and characteristics of the knowledge as well as the interaction between individual actor-specific, firm-specific and country-specific factors. We discuss these factors in the backdrop of two factors that affect the knowledge flows – MNC strategy and the knowledge transfer context. We present our theoretical model and discuss the implications for advancing research in this domain.
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