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Multinational Firm Knowledge, Use of Expatriates, and Foreign Subsidiary Performance

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  • Yulin Fang
  • Guo-Liang Frank Jiang
  • Shige Makino
  • Paul W. Beamish

Abstract

The impact of knowledge transfer on foreign subsidiary performance has been a major focus of research on knowledge management in multinational enterprises (MNEs). By integrating the knowledge-based view and the expatriation literature, this study examines the relationship between a multinational firm's knowledge (i.e. marketing and technological knowledge), its use of expatriates, and the performance of its foreign subsidiaries. We conceptualize that expatriates play a contingent role in facilitating the transfer and redeployment of a parent firm's knowledge to its subsidiary, depending on the location specificity of the organizational knowledge being transferred and the time of transfer. Our analysis of 1660 foreign subsidiaries of Japanese firms over a 15-year period indicates that the number of expatriates relative to the total number of subsidiary employees (1) strengthened the effect of a parent firm's technological knowledge (with low location specificity) on subsidiary performance in the short term, but (2) weakened the impact of the parent firm's marketing knowledge (with high location specificity) on subsidiary performance in the long term. We also found that the expatriates' influence on knowledge transfer eventually disappeared. The implications for knowledge transfer research and the expatriate management literature are discussed. Copyright (c) 2009 Blackwell Publishing Ltd and Society for the Advancement of Management Studies.

Suggested Citation

  • Yulin Fang & Guo-Liang Frank Jiang & Shige Makino & Paul W. Beamish, 2010. "Multinational Firm Knowledge, Use of Expatriates, and Foreign Subsidiary Performance," Journal of Management Studies, Wiley Blackwell, vol. 47(1), pages 27-54, January.
  • Handle: RePEc:bla:jomstd:v:47:y:2010:i:1:p:27-54
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    1. Peltokorpi, Vesa & Yamao, Sachiko, 2017. "Corporate language proficiency in reverse knowledge transfer: A moderated mediation model of shared vision and communication frequency," Journal of World Business, Elsevier, vol. 52(3), pages 404-416.
    2. repec:spr:manint:v:57:y:2017:i:4:d:10.1007_s11575-017-0317-z is not listed on IDEAS
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    4. Jean-Pascal Bassino & Marion Dovis & Pierre van der Eng, 2015. "Do Japanese MNCs use expatriates to contain risk in Asian host countries?," Asia Pacific Business Review, Taylor & Francis Journals, vol. 21(3), pages 383-402, July.
    5. Petrou, Andreas P., 2015. "Arbitrariness of corruption and foreign affiliate performance: A resource dependence perspective," Journal of World Business, Elsevier, vol. 50(4), pages 826-837.
    6. Oehmichen, Jana & Puck, Jonas, 2016. "Embeddedness, Ownership Mode and Dynamics, and the Performance of MNE Subsidiaries," Journal of International Management, Elsevier, vol. 22(1), pages 17-28.
    7. Meyer, Klaus E. & Su, Yu-Shan, 2015. "Integration and responsiveness in subsidiaries in emerging economies," Journal of World Business, Elsevier, vol. 50(1), pages 149-158.
    8. Jiang, Guoliang F. & Holburn, Guy L.F. & Beamish, Paul W., 2014. "The Impact of Vicarious Experience on Foreign Location Strategy," Journal of International Management, Elsevier, vol. 20(3), pages 345-358.
    9. Riaz, Suhaib & Glenn Rowe, W. & Beamish, Paul W., 2014. "Expatriate-deployment levels and subsidiary growth: A temporal analysis," Journal of World Business, Elsevier, vol. 49(1), pages 1-11.
    10. Fang, Yulin & Wade, Michael & Delios, Andrew & Beamish, Paul W., 2013. "An exploration of multinational enterprise knowledge resources and foreign subsidiary performance," Journal of World Business, Elsevier, vol. 48(1), pages 30-38.
    11. repec:eee:worbus:v:53:y:2018:i:2:p:222-236 is not listed on IDEAS
    12. repec:spr:manint:v:55:y:2015:i:1:d:10.1007_s11575-014-0224-5 is not listed on IDEAS
    13. Dutta, Dev K. & Beamish, Paul W., 2013. "Expatriate Managers, Product Relatedness, and IJV Performance: A Resource and Knowledge-based Perspective," Journal of International Management, Elsevier, vol. 19(2), pages 152-162.
    14. Jiang, Guoliang F. & Holburn, Guy L.F. & Beamish, Paul W., 2016. "The spatial structure of foreign subsidiaries and MNE expansion strategy," Journal of World Business, Elsevier, vol. 51(3), pages 438-450.
    15. Abdul Malek, Marlin & Budhwar, Pawan, 2013. "Cultural intelligence as a predictor of expatriate adjustment and performance in Malaysia," Journal of World Business, Elsevier, vol. 48(2), pages 222-231.
    16. Yamin, Mo & Andersson, Ulf, 2011. "Subsidiary importance in the MNC: What role does internal embeddedness play?," International Business Review, Elsevier, vol. 20(2), pages 151-162, April.
    17. repec:spr:manint:v:54:y:2014:i:2:d:10.1007_s11575-013-0185-0 is not listed on IDEAS
    18. Kawai, Norifumi & Strange, Roger, 2014. "Subsidiary autonomy and performance in Japanese multinationals in Europe," International Business Review, Elsevier, vol. 23(3), pages 504-515.
    19. Brendan Boyle & Stephen Nicholas & Rebecca Mitchell, 2016. "The Value of International Assignees’ Knowledge of Interpersonal Networks: Knowledge of People, Networks and Politics and Knowledge Flows in Multinational Enterprises," Management International Review, Springer, vol. 56(3), pages 425-454, June.
    20. repec:eee:worbus:v:52:y:2017:i:6:p:842-853 is not listed on IDEAS
    21. Nair, Smitha R. & Demirbag, Mehmet & Mellahi, Kamel, 2016. "Reverse knowledge transfer in emerging market multinationals: The Indian context," International Business Review, Elsevier, vol. 25(1), pages 152-164.

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