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What Difference Does the Location Make?: A Social Capital Perspective on Transfer of Knowledge from Multinational Corporation Subsidiaries Located in China and Finland

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  • Li Li
  • Wilhelm Barner-Rasmussen
  • Ingmar Björkman

Abstract

This article proposes that MNC subsidiaries located in economically highly developed countries will transfer more knowledge to other corporate units than will subsidiaries located in less developed countries. The direct effect of subsidiary location is tested, as well as the interaction effects of location and social capital, on outward knowledge transfer from subsidiaries to other MNC units. The analysis is based on a sample of 164 MNC subsidiaries located in Finland (an economically highly developed country) and China (a less developed country). Results indicate that subsidiaries located in Finland tend to engage more actively in outward knowledge transfer than do their peer units located in China. The conclusion is therefore that this negative ‘country-of-origin’ effect increases the need for promoting trust and shared vision among individuals and units in the MNC.

Suggested Citation

  • Li Li & Wilhelm Barner-Rasmussen & Ingmar Björkman, 2007. "What Difference Does the Location Make?: A Social Capital Perspective on Transfer of Knowledge from Multinational Corporation Subsidiaries Located in China and Finland," Asia Pacific Business Review, Taylor & Francis Journals, vol. 13(2), pages 233-249, April.
    • Handle: RePEc:taf:apbizr:v:13:y:2007:i:2:p:233-249
    DOI: 10.1080/13602380601133185
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    Citations

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    Cited by:

    1. Smitha R. Nair & Mehmet Demirbag & Kamel Mellahi, 2015. "Reverse Knowledge Transfer from Overseas Acquisitions: A Survey of Indian MNEs," Management International Review, Springer, vol. 55(2), pages 277-301, April.
    2. Purgał-Popiela Joanna, 2015. "The Role of National Cultures in Foreign Subsidiaries’ Practices Applied to Support Knowledge Flow within MNCs," Journal of Intercultural Management, Sciendo, vol. 7(4), pages 21-33, December.
    3. Yakob, Ramsin, 2018. "Augmenting Local Managerial Capacity Through Knowledge Collectivities: The Case of Volvo Car China," Journal of International Management, Elsevier, vol. 24(4), pages 386-403.
    4. Randi Lunnan & Youzhen Zhao, 2014. "Regional headquarters in China: Role in MNE knowledge transfer," Asia Pacific Journal of Management, Springer, vol. 31(2), pages 397-422, June.
    5. Aaron Tham & David Fleischman & Peter Jenner, 2018. "Spilling the social capital beans: a comparative case study of coffee service enterprises within Asia-Pacific," Asia Pacific Business Review, Taylor & Francis Journals, vol. 24(2), pages 150-173, March.
    6. Shuai Chen & Duanxu Wang & Yun Zhou & Ziguang Chen & Daoyou Wu, 2017. "When too little or too much hurts: Evidence for a curvilinear relationship between team faultlines and performance," Asia Pacific Journal of Management, Springer, vol. 34(4), pages 931-950, December.
    7. Zhaleh Najafi-Tavani & Axèle Giroud & Rudolf R. Sinkovics, 2012. "Mediating Effects in Reverse Knowledge Transfer Processes," Management International Review, Springer, vol. 52(3), pages 461-488, June.
    8. Snejina Michailova & Elena Sidorova, 2010. "Knowledge Management In Transition Economies: Selected Key Issues And Possible Research Avenues," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 1(1).

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