Subsidiary roles and dual knowledge flows between MNE subsidiaries and headquarters: The moderating effects of organizational governance types

Abstract

In this paper, we investigate how various types of subsidiary roles affect dual knowledge flows between a focal subsidiary and the multinational enterprise’s headquarters, a thus far overlooked topic in the knowledge management literature. We propose that subsidiaries with a world mandate have a stronger positive impact on dual knowledge flows than subsidiaries with a specialized contributor role. In contrast, we argue that subsidiaries with a local implementer role have a negative impact on dual knowledge flows. Further, we investigate the moderating effect of two different organizational governance types, namely, belonging to a South Korean business group (i.e., Chaebol), and being a small and medium-sized enterprise. Overall, our results from a sample of 1213 foreign manufacturing subsidiaries from 191 South Korean MNEs provide empirical evidence that validates our hypotheses.