The impact of disseminative capacities on knowledge transfers: Does psychic distance really matter?

Abstract

The purpose of this paper is to assess how the transfer of explicit and tacit knowledge is affected by the knowledge disseminative capacity of a foreign parent firm, with an emphasis on the moderating role of psychic distance, by developing and testing a theoretical model of IJV (international joint venture) learning. We tested the hypotheses with survey data collected from 199 IJVs in South Korea, estimating a structural equation model using AMOS 23.0. We found that the capacity of the foreign parent to disseminate knowledge has a more positive effect on the explicit knowledge transfer than tacit knowledge transfer to the IJV. The relationship between disseminative capacity and explicit knowledge transfer is significantly affected by psychic distance, although this is not the case for tacit knowledge transfer. Our results are critical for IJVs and parent firms seeking to improve knowledge transfer, as they establish the importance of parent firms’ disseminative capacities and the moderating role of psychic distance in the process of both tacit and explicit knowledge transfer. This research addresses the research gap regarding disseminative capacity by providing empirical evidence.