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Knowledge transfer to foreign affiliates of multinationals through expatriation

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  • Cho, Jaehan

Abstract

This paper provides empirical evidence of the prevalence and importance of manager transfers to affiliates of multinational corporations (MNCs). Using a unique data set on foreign affiliates of Korean MNCs, I find that most foreign affiliates have managers transferred from their parent companies. These transferred managers at first comprise a significant portion of the managerial positions at foreign affiliates, but gradually become outnumbered by local managers as the affiliates grow. Despite the transferred managers being comparatively few in number, they are positively associated with the growth of the affiliates' productivity. The empirical findings provide evidence that knowledge transfers stemming from the transfer of managers from the parent to foreign affiliates are a source of benefit to foreign affiliates.

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  • Cho, Jaehan, 2018. "Knowledge transfer to foreign affiliates of multinationals through expatriation," Journal of International Economics, Elsevier, vol. 113(C), pages 106-117.
    • Handle: RePEc:eee:inecon:v:113:y:2018:i:c:p:106-117
    DOI: 10.1016/j.jinteco.2018.04.006
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    Cited by:

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    2. Ahn, JaeBin & Park, Jee-Hyeong, 2022. "Identifying FDI types: Watch what they do, not what they say or look like," Economics Letters, Elsevier, vol. 213(C).
    3. Miklós Koren & Álmos Telegdy, 2024. "Expatriate Managers: Effects on Firm Performance," CESifo Working Paper Series 11164, CESifo.
    4. Dimitrios Exadactylos & Massimo Riccaboni & Armando Rungi, 2019. "Talents from Abroad. Foreign Managers and Productivity in the United Kingdom," Working Papers 01/2019, IMT School for Advanced Studies Lucca, revised Dec 2019.
    5. Alexander Jaax & Sébastien Miroudot, 2021. "Capturing value in GVCs through intangible assets: The role of the trade–investment–intellectual property nexus," Journal of International Business Policy, Palgrave Macmillan, vol. 4(3), pages 433-452, September.
    6. Chrysovalantou Milliou & Joel Sandonis, 2020. "Vertical foreign direct investment: Make, buy, and sell," Review of International Economics, Wiley Blackwell, vol. 28(3), pages 884-912, August.
    7. Nicolas Morales, 2019. "High-Skill Migration, Multinational Companies, and the Location of Economic Activity," Working Paper 19-20, Federal Reserve Bank of Richmond.
    8. Marcus Biermann, 2022. "The role of management practices in acquisitions and the FDI location decision," Review of International Economics, Wiley Blackwell, vol. 30(1), pages 137-165, February.
    9. Kang, Youngho & Kim, Ryoonhee & Whang, Unjung, 2023. "International knowledge transfers and capital structure of multinational affiliates: Evidence from expatriate managers as the transfer agents," Journal of Multinational Financial Management, Elsevier, vol. 68(C).
    10. Sana Mumtaz & Sadia Nadeem, 2024. "Examining the distinct role of expatriates in top management teams during international assignments: a systematic review and a way forward," Management Review Quarterly, Springer, vol. 74(3), pages 1669-1693, September.
    11. Nasser Alhamar Alkathiri, 2024. "Determinants of Knowledge Transfer: Expatriate Competencies and Local Staff Absorptive Capacity," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 14360-14378, September.
    12. Jaehan Cho & Bo‐Young Choi, 2023. "The effect of intra‐firm linkages on firm productivity," Review of International Economics, Wiley Blackwell, vol. 31(3), pages 886-903, August.
    13. Vasily Astrov & Dimitrios Exadaktylos & Richard Grieveson & Beate Muck & Josef Pöschl & Massimo Riccaboni & Armando Rungi & Joris M. Schröder, 2020. "Monthly Report No. 03/2020," wiiw Monthly Reports 2020-03, The Vienna Institute for International Economic Studies, wiiw.

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