Factors affecting reverse knowledge transfer from subsidiaries to multinational companies: Focusing on the transference of local market information

• DOI: http://doi.org/10.1002/cjas.1440
• Published date: 01 December 2017
• Date: 01 December 2017

Factors affecting reverse knowledge transfer from

subsidiaries to multinational companies:

Focusing on the transference of local market

information

Kum-Sik Oh*

University of Huddersf‌ield

John Anchor

University of Huddersf‌ield

Abstract

Although research on reverse knowledge transfer (RKT)

from subsidiaries to headquarters is increasingly prominent,

the debate concerning the primary determinants inf‌luencing

RKT has not reached an academic consensus. Therefore, we

have attempted to draw an overall picture for RKT by using

both knowledge transfer capacity and relational capital as

overarching theoretical lenses. In a sample of South

Korea, we f‌ind that knowledge development capability,

subsidiary willingness, and autonomy are critical factors

affecting the reverse transfer of local market in formation

within MNC networks. Furthermore, both the knowledge

integration mechanism and trust are facilitators for

improving relational capital between subsidiaries and

MNCs. This factor facilitates RKT from the former to the

latter. Copyright © 2017 ASAC. Published by John Wiley

& Sons, Ltd.

Keywords: multinational corporations, local market

knowledge, reverse knowledge transfer, knowledge transfer

capacity, relational capital

Résumé

Bien que les travaux consacrés au transfert inverse des

connaissances (désormais RTK) des f‌iliales vers les sièges

des multinationales gagnent en ampleur, la question des

éléments principaux qui favorisent ce transfert continue

de diviser les chercheurs. Dans cet article, nous nous

attelons à proposer une vue d’ensemble du RTK à l’aide

de deux socles théoriques majeurs à savoir: la théorie de

la capacité du transfert des connaissances et la théorie

du capital relationnel. En nous appuyant sur le contexte

sud-coréen, nous montrons qu’àl’intérieur des réseaux de

multinationales, la capacité de développement des

connaissances, la bonne volonté des f‌iliales et l’autonomie

sont autant d’éléments clés qui inf‌luencent le transfert

inverse des informations commerciales locales. Par

ailleurs, le mécanisme d’intégration des connaissances et

la conf‌iance contribuent non seulement à améliorer le

capital relationnel entre les f‌iliales et les multinationales,

mais aussi à faciliter le transfert des connaissances de

celles-là vers celles-ci. Copyright © 2017 ASAC. Published

by John Wiley & Sons, Ltd.

Mots-clés: multinationales, connaissance du marché local,

transfert inverse des connaissances, capacité de transfert des

connaissances, capital relationnel

As globalization and subsequent corporate rivalry have

intensif‌ied, knowledge has been referred to as one of the

key strategic resources for multinational corporations

(MNCs) to achieve organizational goals (Lyles & Salk,

1996; Park, 2011). The possession of invaluable knowledge,

which is not imitable and geographically specif‌ic, not only

helps to develop the foundation of sustainable competitive

advantage, but also functions as a vehicle to facilitate

long-term innovation (Inkpen & Dinur, 1998). Such

knowledge can be categorized into two different types:

explicit and tacit. Explicit knowledge is information that is

relatively uncomplicated to learn in that it is easy to

articulate verbally and codify, whereas tacit knowledge has

a unique characteristic that it is commonly absorbed through

personally embedded experience and thus diff‌icult to acquire

from external sources (Nonaka & Krogh, 2003). That said,

although a f‌irm may achieve competitive advantage based

*Please address correspondence to: Kum-Sik Oh, University of

Huddersf‌ield, The Business School, Queensgate, Huddersf‌ield, HD1 3DH,

UK. Email: sikhappy@hotmail.com,

Canadian Journal of Administrative Sciences

Revue canadienne des sciences de l’administration

34: 329–342 (2017)

Published online 26 April 2017 in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/CJAS.1440

Can J Adm Sci

34(4), 329–342 (2017)Copyright © 2017 ASAC. Published by John Wiley & Sons, Ltd. 329