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The underdetermined knowledge-based theory of the MNC

Author

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  • Anders Fransson

    (UQ Business School, University of Queensland, Brisbane, Australia)

  • Lars Håkanson

    (1] UQ Business School, University of Queensland, Brisbane, Australia[2] Department of International Economics and Management, Copenhagen Business School, Copenhagen, Denmark)

  • Peter W Liesch

    (UQ Business School, University of Queensland, Brisbane, Australia)

Abstract

In this note we revisit two core propositions of the knowledge-based view of the firm found in the seminal work of Kogut and Zander: (1) that multinational corporations (MNCs) exist because transfers and re-combinations of knowledge occur more efficiently inside MNCs than between MNCs and third parties; and (2) that the threat of opportunism is not necessary, although it may be sufficient, to explain the existence of the MNC. Their knowledge-based view shifted the conceptualization of the firm from an institution arising from market failure and transaction costs economizing to a progeny of superior knowledge governance. We question these conclusions, arguing that firms are but one of the many types of “epistemic communities” possessing and nurturing procedural norms, identity, and the cognitive, linguistic and reflexive attributes conducive to efficient exchange and re-combination of knowledge among their members. Important insights may be gained by applying the concept of epistemic communities implicit in the knowledge-based perspective beyond firm-level hierarchies.

Suggested Citation

  • Anders Fransson & Lars Håkanson & Peter W Liesch, 2011. "The underdetermined knowledge-based theory of the MNC," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 42(3), pages 427-435, April.
    • Handle: RePEc:pal:jintbs:v:42:y:2011:i:3:p:427-435
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    Citations

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    Cited by:

    1. Li, Lei & Li, Dan & Goerzen, Anthony & Shi, Weilei (Stone), 2018. "What and how do SMEs gain by going international? A longitudinal investigation of financial and intellectual resource growth," Journal of World Business, Elsevier, vol. 53(6), pages 817-834.
    2. Sara L. McGaughey & Pascalis Raimondos & Lisbeth Cour, 2020. "Foreign influence, control, and indirect ownership: Implications for productivity spillovers," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(9), pages 1391-1412, December.
    3. Sara L. McGaughey & Pascalis Raimondos & Lisbeth Cour, 0. "Foreign influence, control, and indirect ownership: Implications for productivity spillovers," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 0, pages 1-22.
    4. Verwaal, Ernst, 2017. "Global outsourcing, explorative innovation and firm financial performance: A knowledge-exchange based perspective," Journal of World Business, Elsevier, vol. 52(1), pages 17-27.
    5. Jan-Erik Vahlne & Jan Johanson, 2017. "From internationalization to evolution: The Uppsala model at 40 years," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(9), pages 1087-1102, December.
    6. Alex Eapen & Rekha Krishnan, 2019. "Transferring Tacit Know-How: Do Opportunism Safeguards Matter for Firm Boundary Decisions?," Organization Science, INFORMS, vol. 30(4), pages 715-734, July.

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