Linking corporate entrepreneurship, expatriation and reverse knowledge transfers

Purpose - Multinational enterprises (MNEs) encourage their subsidiaries to develop and transfer their unique knowledge and expertise back to the MNE as it is critical for the development of the MNE as a whole. However, what underlies the subsidiary ability to create such specialized knowledge that can be transferred to the MNE is less clear. The purpose of this paper is to examine the influence of MNE entrepreneurial strategy, subsidiary initiatives and expatriation on reverse knowledge transfers in a cross-country comparative context. Design/methodology/approach - Data are gathered through surveys from 429 foreign subsidiaries operating in New Zealand and 164 subsidiaries in Brazil, and these are analyzed using variance-based structural equation modeling. Findings - Subsidiary initiatives partially mediate the relationship between MNE entrepreneurial strategy and reverse knowledge transfers in case of subsidiaries operating in Brazil, but they fully mediate in case of New Zealand. Furthermore, expatriation, in case of the latter, has a negative interaction in the relationship between subsidiary initiative and reverse knowledge transfers, but, in case of the former, it has no moderating role. Overall, the results suggest that the influence of MNE entrepreneurial strategy and expatriation on reverse knowledge transfers can be explained by contingencies such as the subsidiary host economy and the heterogenous HQ–subsidiary relationships. Originality/value - The paper contributes to literature by identifying some contingencies with regard to the occurrence of reverse knowledge transfers. It addresses some research calls with regard to examining reverse knowledge transfers and the role of expatriation across different empirical contexts.