Conventional and Reverse Knowledge Flows in Multinational Corporations

• Published in: Journal of management Vol. 34; no. 5; pp. 882 - 902
• Main Authors: Qin Yang, Mudambi, Ram, Meyer, Klaus E.
• Format: Journal Article
• Language: English
• Published: Los Angeles, CA SAGE Publications 01.10.2008; Sage Publications Ltd
• Subjects: Competitive advantage; Knowledge; Knowledge management; Multinational corporations; Studies; Transition economies; Eastern Europe; Central Europe; multinational subsidiaries; transition economies; knowledge relevance; knowledge management; acquisitions
• ISSN: 0149-2063; 1557-1211
• DOI: 10.1177/0149206308321546

Leveraging knowledge from geographically disparate subsidiaries is a crucial source of competitive advantage for multinational corporations (MNCs). This study investigates the determinants of knowledge transfers to and from newly acquired subsidiaries in three transition economies in Central and Eastern Europe. It is hypothesized that the determinants of conventional knowledge transfers from MNC parents to subsidiaries and reverse knowledge transfers from subsidiaries to MNC parents are based on different transfer logics. A sample of 105 acquired subsidiaries revealed that organizational characteristics are important in conventional knowledge flows from headquarters, so that subsidiaries acquired with competence-creating objectives receive significantly larger inflows. Knowledge characteristics are important in reverse flows to headquarters so that subsidiaries whose knowledge is more relevant are able to transmit significantly larger outflows. Host country locations have significant moderating effects. The significance of the directional context in knowledge transfers is an important new finding.