Reverse knowledge transfer from subsidiaries to headquarters: Chinese firms in Africa

Abstract

This study aims to identify the factors influencing the reverse knowledge transfer (RKT) of local market information from overseas subsidiaries to their multinational enterprise (MNE) headquarters. For this objective, this study uses both knowledge transfer capacity and relational capital as overarching theoretical concepts. Survey data are collected from Chinese MNEs operating in Africa, which is often referred to as an unknown ‘blue ocean’ economy. Results show that the components (i.e., knowledge development capabilities and possession of prior relevant knowledge) of knowledge transfer capacity increase relational capital. Specifically, knowledge development capabilities highly facilitate the overseas subsidiaries' RKT, and relational capital functions as a vehicle promoting such phenomenon. Findings can provide valuable theoretical contributions and practical implications to MNEs intending to enter ‘blue ocean’ markets.