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How Does Knowledge Transfer from Foreign Subsidiaries Affect Parent Companies' Innovative Capacity

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  • Lucia Piscitello
  • Larissa Pabbiosi

Abstract

The paper addresses reverse knowledge transfer (RKT) from foreign subsidiary to parent company. Specifically, it aims at investigating to what extent the effectiveness of such a transfer is influenced by: (i) the organizational mechanisms employed for transferring knowledge; (ii) the subsidiary’s role, its autonomy, and its relationships with the local context. The empirical analysis considers 162 transfers of best practices possessed by foreign subsidiaries and transferred back to their Italian parent companies. Results confirm that the impact of RKT on the parent company’s innovativeness is greater when: (i) person-based mechanisms are employed for transferring knowledge; (ii) subsidiaries are competence-creating; and (iii) knowledge developed by subsidiaries benefits from local external linkages.

Suggested Citation

  • Lucia Piscitello & Larissa Pabbiosi, 2006. "How Does Knowledge Transfer from Foreign Subsidiaries Affect Parent Companies' Innovative Capacity," DRUID Working Papers 06-22, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  • Handle: RePEc:aal:abbswp:06-22
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    File URL: http://www3.druid.dk/wp/20060022.pdf
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    References listed on IDEAS

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    1. Sterlacchini Alessandro, 2004. "Ricerca e alta tecnologia in Italia: le basi per un rilancio," L'industria, Società editrice il Mulino, issue 4, pages 675-706.
    2. Dooley, J J, 1998. "Unintended consequences: energy R&D in a deregulated energy market," Energy Policy, Elsevier, vol. 26(7), pages 547-555, June.
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    Citations

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    Cited by:

    1. Bernhard Dachs & Bernd Ebersberger & Steffen Kinkel & Oliver Som, 2015. "The effects of production offshoring on R&D and innovation in the home country," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(1), pages 9-31, March.
    2. McGuinness, Martina & Demirbag, Mehmet & Bandara, Sasanka, 2013. "Towards a multi-perspective model of reverse knowledge transfer in multinational enterprises: A case study of Coats plc," European Management Journal, Elsevier, vol. 31(2), pages 179-195.
    3. Celeste Amorim Varum & Lucia Piscitello, 2011. "The Role of Public Policy in Strengthening Innovation through Internationalization," Chapters,in: Science and Innovation Policy for the New Knowledge Economy, chapter 7 Edward Elgar Publishing.
    4. Wixted, Brian, 2006. "Cluster Complexes: A Framework for Understanding the Internationalisation of Innovation Systems," MPRA Paper 846, University Library of Munich, Germany.
    5. Ionara Costa & Howard Rush & Andrew Grantham, 2015. "Knowledge Here, Knowledge There: Multilatinas and their European Subsidiaries," Globelics Working Paper Series 2015-13, Globelics - Global Network for Economics of Learning, Innovation, and Competence Building Systems, Aalborg University, Department of Business and Management.
    6. Massimo G. Colombo & Luca Grilli & Lucia Piscitello & Cristina Rossi-Lamastra (ed.), 2011. "Science and Innovation Policy for the New Knowledge Economy," Books, Edward Elgar Publishing, number 13746, April.
    7. Driffield, Nigel & Love, James H. & Yang, Yong, 2016. "Reverse international knowledge transfer in the MNE: (Where) does affiliate performance boost parent performance?," Research Policy, Elsevier, vol. 45(2), pages 491-506.

    More about this item

    Keywords

    External linkages; organizational mechanisms; parent company's innovativeness; reverse knowledge transfer; subsidiary’s characteristics;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O39 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Other

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