Towards knowledge-based flexibility for manufacturing enterprises: with a case study

Foreign direct investment can help developing countries to participate in various segments of the supply chain as these countries can benefit from additional knowledge, improved industrial capacity, and higher economic growth. This paper focuses on the importance of knowledge flexibility in enhancing the production activity of clothing manufacturing enterprises located in developing countries beyond the production segment of the supply chain. In this paper, the level of knowledge flexibility is determined by building a model that includes both the channels and the factors affecting the transfer of knowledge from the head office to their subsidiaries located in developing countries. The main channels of knowledge transfer included in the model are: 1) employment and training of local employees; 2) linkages established with the host economy; 3) demonstration effects, while the key factors considered are: 1) knowledge management; 2) investments made in the host territory; 3) possession of alternative production plants in other host territories.