Expatriate Knowledge Transfer, Subsidiary Absorptive Capacity, and Subsidiary Performance

Abstract

In this study, we theoretically identify three dimensions of expatriate competenciesability, motivation, and opportunity seeking-for knowledge transfer. Integrating the ability-motivation-opportunity framework and the absorptive capacity perspective, we propose that expatriate competencies in knowledge transfer influence a subsidiary's performance through the knowledge received by the subsidiary, but tbat this indirect eñect is stronger when subsidiary absorptive capacity is greater. We collected multisource, time-lagged data from 162 British subsidiaries of Taiwanese multinational ñrms. The results support our hypotheses. Overall, we contribute to expatriation theory and research by revealing speciñc expatriate competencies as well as identifying boundary conditions for successful expatriate knowledge transfer.

Why and How Does Shared Language Affect Subsidiary Knowledge Inflows? A Social Identity Perspective

“…Our results showed that 95% of the HR managers were host country nationals, a higher share than any of the other functions. Finally, previous research suggests that HR managers' assessments of subsidiary knowledge inflows are highly consistent with the assessments of other subsidiary executives (Chang et al, 2012).…”

“…Further, implicit to our arguments is that MNE knowledge flows have positive performance implications. However, given that the relation between subsidiary knowledge inflows and subsidiary performance has already been established (e.g., Chang, Gong, & Peng, 2012;Fang et al, 2010), our aim rather is to examine shared language-related predictors of tacit knowledge receipt in subsidiaries.…”

Entrepreneurs as intermediaries

“…In other words, entrepreneurs thrive on chaos (Brown & Eisenhardt, 1998). Since the extent of knowledge complexity would determine the degree of information asymmetries in an industry because knowledge sources and recipients are not likely to possess enough information about knowledge characteristics (Chang, Gong, & Peng, 2012). Thus, buyers may not have the knowledge to be able to identify with whom they have to transact with at what prices.…”

Theoretical Foundations

“…However, by 2015 many MNEs have mature subsidiaries in a range of emerging economies, and their key concern is operations and growth of these subsidiaries. Research focus thus has moved to the development, coordination, and exploitation of resources in different units of the MNE (Chang, Gong, & Peng, 2012). This includes topics such as increases of resource commitments over time (Johanson & Johanson, 2006;Santangelo & Meyer, 2011), competitive dynamics (Chang & Park, 2012;Narayanan & Fahey, 2005), headquarters-subsidiary relationships (de Jong et al, 2015;Jindra, Giroud, & Scott-Kennel, 2009), and subsidiary exports (Estrin, Meyer, Wright, & Foliano, 2008;Filatotchev, Stephan, & Jindra, 2008;Filatotchev, Liu, Buck, & Wright, 2009).…”