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Can knowledge transfer within MNCs hurt subsidiary performance? The role of subsidiary entrepreneurial culture and capabilities

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  • Li, Jingxun
  • Lee, Ruby P.

Abstract

This study extends the literature on knowledge transfer in MNCs by exploring how two sources of knowledge transfers, one from headquarters and the second from other peer subsidiaries, influence a focal subsidiary's capabilities and performance. Drawing on the tenet of the resource-based and dynamic capabilities perspectives, and using data from 167 foreign subsidiaries in China, we find that both sources of knowledge transfers positively influence a focal subsidiary's capabilities, albeit at different rates. Our results further show that although a focal subsidiary's entrepreneurial culture strengthens the effect of headquarters knowledge transfer on its capabilities, it weakens the impact of peer subsidiary knowledge transfer on capabilities. These results suggest that a focal subsidiary's entrepreneurial culture serves as a double-edged sword when it comes to knowledge transfer within its MNC network. This study provides key implications for management in terms of the mechanisms and processes (i.e., entrepreneurial culture and capabilities) that drive or hinder the efficacy of knowledge transfer from headquarters and peer subsidiaries on a focal subsidiary's performance.

Suggested Citation

  • Li, Jingxun & Lee, Ruby P., 2015. "Can knowledge transfer within MNCs hurt subsidiary performance? The role of subsidiary entrepreneurial culture and capabilities," Journal of World Business, Elsevier, vol. 50(4), pages 663-673.
    • Handle: RePEc:eee:worbus:v:50:y:2015:i:4:p:663-673
    DOI: 10.1016/j.jwb.2014.09.004
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    2. Kawai, Norifumi & Chung, Chul, 2019. "Expatriate utilization, subsidiary knowledge creation and performance: The moderating role of subsidiary strategic context," Journal of World Business, Elsevier, vol. 54(1), pages 24-36.
    3. Lee, Jeoung Yul & Yang, Young Soo & Park, Byung Il, 2020. "Interplay between dual dimensions of knowledge sharing within globalized chaebols: The moderating effects of organization size and global environmental munificence," International Business Review, Elsevier, vol. 29(6).
    4. Lee, Steve Kyungjae & Ghauri, Pervez N. & Oh, Kum-Sik & Xiao, Shufeng (Simon) & Park, Byung Il & Romero-Martínez, Ana M., 2024. "Reverse knowledge transfer from subsidiaries to headquarters: Chinese firms in Africa," Journal of International Management, Elsevier, vol. 30(1).
    5. Jingxun Li & Ruby P. Lee & Lian Zhang, 2018. "Managerial ties and knowledge transfer in business ecosystems: Evidence from Korean subsidiaries in China," Asian Business & Management, Palgrave Macmillan, vol. 17(3), pages 183-207, July.
    6. Dimitrios Georgakakis & Mads E. Wedell-Wedellsborg & Tommaso Vallone & Peder Greve, 2023. "Strategic leaders in multinational enterprises: A role-specific microfoundational view and research agenda," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(3), pages 514-537, April.
    7. Najafi-Tavani, Zhaleh & Robson, Matthew J. & Zaefarian, Ghasem & Andersson, Ulf & Yu, Chong, 2018. "Building subsidiary local responsiveness: (When) does the directionality of intrafirm knowledge transfers matter?," Journal of World Business, Elsevier, vol. 53(4), pages 475-492.
    8. Fu, Xiaolan & Sun, Zhongjuan & Ghauri, Pervez N., 2018. "Reverse knowledge acquisition in emerging market MNEs: The experiences of Huawei and ZTE," Journal of Business Research, Elsevier, vol. 93(C), pages 202-215.
    9. Tao Bai & Jialin Du & Angelo M. Solarino, 2018. "Performance of foreign subsidiaries “in” and “from” Asia: A review, synthesis and research agenda," Asia Pacific Journal of Management, Springer, vol. 35(3), pages 607-638, September.
    10. Fortwengel, Johann & Gutierrez Huerter O, Gabriela & Kostova, Tatiana, 2023. "Three decades of research on practice transfer in multinational firms: Past contributions and future opportunities," Journal of World Business, Elsevier, vol. 58(3).
    11. Crespo, Cátia Fernandes & Lages, Luis Filipe & Crespo, Nuno Fernandes, 2020. "Improving subsidiaries' innovation through knowledge inflows from headquarters and peer subsidiaries," Journal of International Management, Elsevier, vol. 26(4).
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    13. Crespo, Cátia Fernandes & Crespo, Nuno Fernandes & Curado, Carla, 2022. "The effects of subsidiary’s leadership and entrepreneurship on international marketing knowledge transfer and new product development," International Business Review, Elsevier, vol. 31(2).

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