Reverse Knowledge Transfer Research Articles

Reverse international knowledge transfer in the MNE: (Where) does affiliate performance boost parent performance?

We examine the extent to which the knowledge or technological capability of foreign affiliates actually enhances the performance of their parent companies. Our results draw on a firm-level panel of more than 1600 multinationals and more than 4000 of their overseas affiliates, covering 46 home and host countries. We find considerable evidence of enhanced parent productivity as a result of their affiliates’ performance, which we interpret as evidence of reverse knowledge transfer from affiliates to parents. This effect is robust to different tests including IV estimation and a falsification exercise based on unconnected ‘matched’ affiliates. We find that both physical and strategic location markedly affects the affiliate-parent relationship, and that distance reduces the positive impact that affiliate performance has on that of the parent.

Reverse knowledge transfer and subsidiary power

Rather than looking at the more typical inter-company level adopted in most B2B marketing, this study investigates how a subsidiary gains power within the context of the multinational corporation. Building on network theory and dependence theory, two approaches well-known in the B2B marketing literature, this study aims to test empirically the impact of reverse knowledge transfer, knowledge transfer from a subsidiary to headquarters, on subsidiary influence and autonomy. The survey-based data from 183 subsidiaries located in the UK suggests that reverse knowledge transfer significantly enhances the relative influence of the subsidiary within the broader multinational corporation. Moreover, we find that this association is (a) stronger when the level of internal embeddedness is high and (b) weaker when the level of external embeddedness is high. Finally, our results indicate that a higher level of subsidiary autonomy only occurs in conjunction with internally embedded reverse knowledge transfer.

Reverse knowledge transfer in emerging market multinationals: The Indian context

This study examines knowledge acquisitions of Indian multinationals via overseas mergers and acquisitions. Specifically, the paper examines the effects of the perceived subsidiary capability, parent absorptive capacity, and the relevance of the target knowledge on reverse knowledge transfer. Using firm level data from a survey of Indian multinationals (with overseas acquisitions), we find that perceived subsidiary capability, knowledge relevance, and absorptive capacity positively influence reverse knowledge transfer. The results also highlight the moderating role of knowledge relevance and the mediating effects of absorptive capacity.

Reverse Knowledge Transfer from Overseas Acquisitions: A Survey of Indian MNEs

In this paper, we examine the effects of subsidiary level factors on reverse knowledge transfer (RKT) in MNEs from the emerging market of India (EM-MNEs). We argue that subsidiary level competencies and capabilities play a vital role in persuading the parent EM-MNEs to initiate the RKT in their attempt to overcome the disadvantages they have. The competency levels of the subsidiary have been captured in terms of the role that the subsidiary has in the network and its host country endowments. In addition, RKT requires the subsidiary units to collaborate closely with the parent EM-MNEs and is also dependent on the extent of complexity of this knowledge. The study involves a survey of MNEs from the emerging market of India with overseas acquisitions. We develop a set of hypotheses and test them with the data using OLS regression. Results show that higher levels of collaboration facilitate RKT to the parent firm, and this effect is more prominent in high technology and knowledge intensive industries. Also, subsidiaries that hail from host countries with a higher competitive index compared to India and those that perform the role of specialised contributors contribute more towards RKT. In addition, a higher level of knowledge complexity leads to a greater extent of RKT.

Overseas Dispatch of R&D Activities and Reverse Knowledge Transfer within Japanese Multinational Enterprises

Overseas Dispatch of R&D Activities and Reverse Knowledge Transfer within Japanese Multinational Enterprises

A concerted effort to transfer knowledge within European MNCs

This conceptual paper contributes to the nascent debate on a stronger appreciation of subsidiaries' contribution to knowledge creation and transfer within the Multinational Corporation (MNC) network reflected by increased levels of reverse and/or horizontal knowledge transfer. Furthermore, the current literature implies scattered evidence with respect to the influential factors and controversial power interests on behalf of the players involved: the MNC headquarter, the individual subsidiaries and between the subsidiaries. For this reason, the paper aims to develop a holistic conceptual framework as a basis for a future research agenda on multidirectional knowledge transfer driven by a concerted effort of all partners involved. Owing to its high cultural density and diversity in a close geographical space, Europe is regarded an ideal and vibrant setting for research on knowledge creation. As a side effect of an increased level of competitiveness, MNCs might play a significant role in contributing to the EU objectives of higher levels of prosperity of an ever more integrated economy and of new energies for the region's technological and industrial development.

How does overseas labour quality affect multinational performance? A value chain perspective

The traditional view of the multinational corporation (MNC) envisages knowledge flowing from the parent company to the overseas affiliates to the benefit of the latter. But recent research has suggested that there may be a reverse knowledge transfer effect through which MNC parent companies may benefit from the activities of their overseas affiliates. In this paper, we consider whether the labour quality in overseas affiliates has an impact upon the productivity of MNC parent companies. We test empirically for this relationship using a firm-level panel of more than 1,600 manufacturing MNCs and more than 2,400 overseas affiliates, covering 30 home and host countries in the period 2004-2012. Our main results indicate that highly- skilled labour in overseas affiliates has a significant impact upon the productivity of parent companies, suggesting the existence of a strong reverse knowledge transfer effect - a finding robust to a large set of different specifications. In addition, we also establish that this knowledge transfer effect is greater (1) when the overseas affiliates are in related, rather than unrelated, industries; (2) when the overseas affiliates are downstream, rather than upstream, in the MNCs global value chains; (3) when the overseas affiliates involve horizontal, rather than vertical, FDI; and (4) when the overseas affiliates are wholly-owned subsidiaries, rather than joint ventures.

Corporate Language Proficiency and Reverse Knowledge Transfer in Multinational Corporations: Interactive Effects of Communication Media Richness and Commitment to Headquarters

While corporate language proficiency provides the ability for employees in foreign subsidiaries to transfer knowledge to headquarters (HQ) in multinational corporations, this topic has received relatively little attention in international management research. In this paper, I link host country national (HCN) employee corporate language proficiency to reverse knowledge transfer. In addition to its direct effect, I draw on media richness theory and related research to hypothesize that communication media richness has a mediating effect between HCN corporate language proficiency and reverse knowledge transfer. As employees also need to be motivated to transfer knowledge to HQ, I draw on ability–motivation frameworks to hypothesize that HCN employee commitment to HQ has a moderating effect between communication media richness and reverse knowledge transfer. Data derived at two points in time from 661 functional departments of foreign subsidiaries in Japan provide support for the direct and interactive effects.

국제합작 파트너 기업 간 지식공유와 관계몰입이 역지식이전역량에 미치는 영향: 지식창출역량의 매개효과를 중심으로

국제합작 파트너 기업 간 지식공유와 관계몰입이 역지식이전역량에 미치는 영향: 지식창출역량의 매개효과를 중심으로

The neglected effects of R&D captive offshoring in emerging countries on the creation of knowledge at home

Research and Development (RD however, although firms from advanced countries are the top investors in foreign R&D and emerging countries are top destinations, the effects of R&D captive offshoring in emerging countries on the creation of knowledge at home—i.e. on headquarter and home system of innovation in advanced countries—have been neglected. Based on the literature on the knowledge-based view of the firm and the reverse knowledge transfer (RKT), I discuss two possible effects, i.e. the “RKT-based division of labor” hypothesis and the “hollowing-out” hypothesis. I review the recent empirical evidence in support of either of the two hypotheses, and it emerges that positive effects are likely to occur, but also that there is a need for further empirical evidence.

Knowledge-Sharing Subsidiaries in Central and Eastern Europe

This paper investigates reverse knowledge transfer of foreign multinational subsidiaries in Central and Eastern Europe (Czech Republic, Poland and Hungary) in the light of the current political and economic transformations of these former communist countries. The study examines whether foreign subsidiaries in the region share their knowledge base with their sister-subsidiaries and parent company, and the role of various factors in this knowledge sharing. These factors include subsidiary initiative, subsidiary autonomy, local dynamism and corporate embeddedness. A proprietary dataset is used for statistical analysis.

Knowledge management practices for innovation: a multinational corporation’s perspective

Purpose– This paper aims to assess the importance of different knowledge management practices to promote organizational innovation in multinational companies. The links among internationalization, reverse knowledge transfer and social capital and organizational innovation are analyzed.Design/methodology/approach– Structural equation modeling was used to check the research hypotheses with a sample of 104 multinational companies.Findings– The results show that internalization has no direct effect on organizational innovation but a indirect effect trhrough the transfer of knowledge from external subsidiaries to the headquarter. Furthermore, this knowledge and other that comes from internal and external social capital is essential for the development of innovations.Research limitations/implications– Self-reporting by the CEOs may be the most significant limitation, as a single key informant provided the data; multiple informants would enhance the validity of the research findings. A second limitation is the cross-sectional design of the research that does not allow observation of the short- and long-term impact of the relationships among the variables.Practical implications– Organizational innovation is not an easy task. However, those multinational companies which foster knowledge management practices that generate new knowledge from external subsidiaries, internal or external social relationships, will facilitate the generation of innovations. In consequence, these companies should foster the generation of knowledge from different sources.Originality/value– The focus of the study in this paper is on multinational companies and the possibility to acquire knowledge from different sources (inside organization, external local environment and international context). Specially, focus on the transfer of knowledge from subsidiaries to headquarters (reverse knowledge transfer), as it is insufficiently investigated by current literature.

In Search Of A Theoretical Framework For Reverse Innovations

Despite the increased strategic importance of reverse innovation, an inspection of the literature suggests that there is still confusion as to what it is, how it is related to, yet distinct from, other types of innovation (e.g., frugal or disruptive innovation), and what factors are needed for it to occur successfully. Best practices and underlying conceptual frameworks appear to be lacking or somewhat scarce in both academic and practitioner literature. In this paper, we propose that reverse innovation shares some common underpinnings with the well-established concept of reverse knowledge transfer. This provides a robust foundation upon which to study the phenomenon of reverse innovation. An added benefit of this perspective is that it enhances the generalizability of research on reverse knowledge transfer. By connecting reverse knowledge transfer and reverse innovation under a general perspective of global competence creation and transfer, we believe we provide a framework that allows all firms, regardl...

The Effect of Local Market Knowledge Acquisition through Social Capital of Foreign Subsidiary on Reverse Knowledge Transfer

The Effect of Local Market Knowledge Acquisition through Social Capital of Foreign Subsidiary on Reverse Knowledge Transfer

Reverse Knowledge Transfer: A Comparison Between Subsidiaries of Emerging Markets and Subsidiaries of Developed Markets

This paper aims at contrasting the impact of the internal and external network on the reverse knowledge transfer process in foreign subsidiaries in Brazil and Brazilian subsidiaries abroad. With regard to foreign subsidiaries, one hundred seventy-two companies were obtained, and as to the database pertinent to subsidiaries of Brazilian firms, the sample acquired consisted of seventy-eight Brazilian subsidiaries abroad. The results show the impact of the network for both types of multinationals, however, the same does not occur with integration. DOI:10.5585/riae.v12i4.2026

Transferência Reversa de Conhecimento: Um Comparativo entre as Subsidiárias de Mercados Emergentes e Subsidiárias de Mercados Desenvolvidos

This paper aims at contrasting the impact of the internal and external network on the reverse knowledge transfer process in foreign subsidiaries in Brazil and Brazilian subsidiaries abroad. With regard to foreign subsidiaries, one hundred seventy-two companies were obtained, and as to the database pertinent to subsidiaries of Brazilian firms, the sample acquired consisted of seventy-eight Brazilian subsidiaries abroad. The results show the impact of the network for both types of multinationals, however, the same does not occur with integration. DOI:10.5585/riae.v12i4.2026

Reverse Knowledge Transfer in MNEs: Subsidiary Innovativeness and Entry Modes

It is now well recognized that multinational enterprises (MNEs) are differentiated networks wherein subsidiaries vary in terms of their ability to create new knowledge and competencies for their parent groups. In much of this theory, it is taken for granted that subsidiary innovativeness has a positive correlation with the extent of reverse knowledge transfers to the parent MNE. Relying on the headquarters-subsidiary view of the MNE, we argue that, beyond a point, increasing subsidiary innovativeness will be associated with lower reverse knowledge transfers. Further, we argue that this relationship is sensitive to the subsidiary entry mode. Using data from a sample of 293 Italian subsidiaries, we find strong support for our hypotheses. In particular, our results confirm that the effect of subsidiary innovativeness on reverse knowledge transfers displays an inverted-U shape, and that the curvilinearity is greater for greenfield entries relative to acquisition entries. The U-shaped relationship between subsidiary innovativeness and reverse knowledge transfers, as well as the sensitivity of this result to entry mode are important new findings in the literature on the role of subsidiaries in competence creation.

The interplay of networking activities and internal knowledge actions for subsidiary influence within MNCs

Knowledge-based and network-based activities are known determinants of foreign subsidiary influence. We demonstrate that the interaction between these factors is essential in understanding how subsidiaries gain influence within an MNC. We test this using data on 184 foreign-owned subsidiaries in the UK. The results indicate that the possession of strategic resources (knowledge or embedded relations) increases subsidiary influence only when the knowledge is transferred back to headquarters. Importantly, the impact of subsidiary–headquarters embeddedness, external embeddedness and knowledge development on influence is mediated by the extent of reverse knowledge transfer. This mediating role sheds new light on the antecedents to subsidiary influence.

An empirical study of Chinese subsidiaries’ decision-making autonomy in Germany

This article analyses the parent–subsidiary relationship of Chinese subsidiaries, taking those located in Germany as an example. Our research focuses on two major questions: (i) What degree of decision-making autonomy do Chinese subsidiaries in Germany hold? (ii) What are the factors that determine the degree of their decision-making autonomy? On the basis of institutional theory and resource-dependence theory, we hypothesize that the autonomy of Chinese subsidiaries is: (i) influenced by state ownership of their parent companies and (ii) related to the extent of their reliance on knowledge transfer from subsidiaries to headquarters. In order to test these hypotheses, a multiple regression analysis was conducted. We found that Chinese companies apply no rigid rules regarding authority over decision making in their subsidiaries. Although the reliance on reverse knowledge transfer exerts a strong and positive influence on the subsidiary’s decision-making autonomy, state ownership of Chinese parent companies is not an important determinant of subsidiary autonomy.

Conventional and Reverse Knowledge Transfers in International Joint Ventures

The purpose of this paper is to develop and test a theoretical model to examine the dynamics of knowledge transfers from foreign parent firms to their IJVs (conventional transfers) and knowledge transfers from IJVs to their foreign parent firms (reverse knowledge transfers).We estimated a structural equation model (AMOS 20.0) using survey data from 199 Korean IJVs. The key findings highlight the importance of the interaction between conventional and reverse knowledge transfer processes. We find that shared vision does not directly affect reverse knowledge transfer; rather, shared vision positively impacts reverse knowledge transfer indirectly through the full mediating effect of conventional knowledge transfer. We also find negative relationships between IJV performance and reverse knowledge flows, reflecting lower levels of engagement between parents and IJVs when IJVs perform well. This results in a lower level of learning by parents. The study confirms that learning intents and capability to absorb knowledge of IJVs positively affect conventional knowledge transfers.