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Knowledge sourcing from advanced markets subsidiaries: political embeddedness and reverse knowledge transfer barriers in emerging-market multinationals
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.ORCID iD: 0000-0001-5393-2440
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
2017 (English)In: Industrial and Corporate Change, ISSN 0960-6491, E-ISSN 1464-3650, Vol. 26, no 2, p. 311-332Article in journal (Refereed) Published
Abstract [en]

This article focuses on emerging-market multinationals and their intent to source knowledge from advanced countries. A single in-depth case study of a Chinese state-owned multinational is used to shed light on the relationship between political embeddedness and the potential to reverse knowledge transfer from advanced market subsidiaries. Specifically, we argue that a strong home-country political embeddedness enhances specific organizational barriers to reverse knowledge transfer, which undermines the strategic intent of knowledge-seeking internationalization, common to much Foreign Direct Investment (FDI) by emerging-market multinationals in recent years. This article contributes to research on knowledge sourcing within the context of south-north FDI by highlighting specific effects of political embeddedness at organizational level, which are critical for the possibilities to reverse knowledge transfer; our study is also relevant to international business, as new empirical insights related to the international organization and management of state-owned multinationals are discussed.

Place, publisher, year, edition, pages
2017. Vol. 26, no 2, p. 311-332
National Category
Business Administration
Identifiers
URN: urn:nbn:se:uu:diva-321347DOI: 10.1093/icc/dtx001ISI: 000397948400007OAI: oai:DiVA.org:uu-321347DiVA, id: diva2:1092536
Available from: 2017-05-03 Created: 2017-05-03 Last updated: 2018-10-21
In thesis
1. The Conundrum of Home-country Political Embeddedness: Impact on Reverse Knowledge Transfer in Emerging-market Multinationals
Open this publication in new window or tab >>The Conundrum of Home-country Political Embeddedness: Impact on Reverse Knowledge Transfer in Emerging-market Multinationals
2018 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Emerging-market multinational corporations (EMNCs), particularly state-owned ones, have been increasingly active players in the global arena and have become a significant feature of the global business landscape. Research on EMNCs has focused on their distinctive features, particularly on their politically embedded nature in home institutions. Another important feature in this field is the aim of knowledge-related asset augmentation overseas via strategic asset-seeking investments, conceptualized as a springboard perspective. In this vein, reverse knowledge transfer from subsidiaries to home-country organizations becomes critically significant in order for EMNCs to achieve the innovation catch-up. In response to the rise of EMNCs, this thesis focuses on the two above-mentioned core features of EMNCs by looking specifically at the impact of the home-country political embeddedness of EMNCs on reverse knowledge transfer. 

The empirical investigation uses a sequential mixed-method approach that is comprised of qualitative research via a single case study of one Chinese state-owned multinational and quantitative research via a survey of 99 Chinese multinationals and their 177 overseas subsidiaries. The findings, based on empirical data, show, on one hand, that headquarters’ strong political embeddedness triggers strong intentions to seek and acquire knowledge from subsidiaries, particularly in advanced markets, through aligning with government objectives or shaping organizational distance between headquarters and subsidiaries. On the other hand, headquarters’ strong political embeddedness hampers reverse knowledge transfer practices in EMNCs by engendering a number of organizational barriers, including a low level of headquarters’ absorptive capacity, inferior performance of headquarters’ entrepreneurial role, less willingness of subsidiaries to transfer knowledge, and larger organizational distance between headquarters and subsidiaries. Consequently, headquarters’ political embeddedness acts as both a driver and a barrier to reverse knowledge transfer, which creates a paradox. This finding contrasts with those of most prior studies, where political relations were found to be a source of competitive advantage for international expansion.

By stressing the importance of home-country political embeddedness in reverse knowledge transfer, this thesis extends the literature on the subject and advances the conceptualizations of the differentiated network multinationals and the embedded multinationals, which have focused almost exclusively on subsidiary embeddedness and ignored headquarters’ embeddedness in a home context. The present thesis also contributes to the literature on the parenting role of headquarters by providing evidence in support of a pessimistic view of headquarters’ parenting advantage and identifying political embeddedness as an important element that contributes to the value-creating/destroying role of headquarters in the EMNC context.

Place, publisher, year, edition, pages
Uppsala: Acta Universitatis Upsaliensis, 2018. p. 139
Series
Doctoral thesis / Företagsekonomiska institutionen, Uppsala universitet, ISSN 1103-8454 ; 195
Keywords
emerging-market multinational corporations, political embeddedness, reverse knowledge transfer, headquarters
National Category
Social Sciences Business Administration
Research subject
Business Studies
Identifiers
urn:nbn:se:uu:diva-349162 (URN)978-91-506-2702-2 (ISBN)
Public defence
2018-06-13, Lecture Hall 2, Ekonomikum, Kyrkogårdsgatan 10A, Uppsala, 13:15 (English)
Opponent
Supervisors
Available from: 2018-05-23 Created: 2018-04-23 Last updated: 2018-05-23
2. The Modern Journey to the West: Exploring Key Factors Influencing Reverse Knowledge Transfer in Emerging-market Multinationals
Open this publication in new window or tab >>The Modern Journey to the West: Exploring Key Factors Influencing Reverse Knowledge Transfer in Emerging-market Multinationals
2018 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

As latecomers to the world economy, emerging-market multinational corporations (EMNCs) often use international expansion as a ‘springboard’ for seeking and accessing advanced knowledge from overseas, particularly from advanced markets, with the goal of offsetting their competitive weaknesses and catching up with their Western counterparts. This behavior is conceptualized as the springboard perspective formulated by Luo and Tung (2007). From this perspective, reverse knowledge transfer (RKT) from subsidiaries to home-country units is a compulsory path to achieve innovation catch-up in EMNCs. This thesis explores reverse knowledge transfer in EMNCs and its key influencing factors, an important and timely phenomenon that has so far received little attention in research.

Empirical data were collected through a combination of a qualitative case study of one Chinese state-owned multinational and a survey of Chinese multinationals. Results suggest that headquarters’ political relationships in home countries both promote and inhibit RKT practices in EMNCs. Specifically, headquarters’ political relationships are found to enhance the motivation to seek and demand knowledge from subsidiaries. However, at the same time, these political relationships hinder RKT by reducing headquarters’ absorptive capacity, subsidiary willingness and headquarters’ control over subsidiaries, and by increasing the organizational distance between headquarters and subsidiaries. Thus, this study highlights the fact that political relationships can be a liability for cross-border knowledge acquisition. These results contrast with many prior studies, which have tended to view political ties mostly as a source of competitive advantage for EMNCs during internationalization.

This study also shows how subsidiary willingness to transfer knowledge is restricted by headquarters’ political ties and a large organizational distance between headquarters and subsidiaries in EMNCs. However, the low willingness of subsidiaries to transfer knowledge can be ameliorated if expatriate managers have good-quality relationships with subsidiary local managers. Moreover, the findings suggest that expatriate managers do not engage directly in RKT through their relationship ties. Instead, their relationship ties with local managers can enhance the extent of RKT by stimulating subsidiary willingness. This finding challenges the view of expatriate social ties as channels for transferring knowledge.

By highlighting the relevance of headquarters’ home-country political relationships and expatriate managers’ relationships in the RKT practices of EMNCs, this thesis enriches the literature on reverse knowledge transfer, on the political relationships of EMNCs and on expatriation. In addition, it contributes to the view of multinationals as a differentiated network. This research also contributes to the understanding of the antecedents and difficulties behind the logic of springboard internationalization and extends the knowledge of intra-organizational agency problems in the context of expatriates and reverse knowledge transfer.

Place, publisher, year, edition, pages
Uppsala: Acta Universitatis Upsaliensis, 2018. p. 123
Series
Doctoral thesis / Företagsekonomiska institutionen, Uppsala universitet, ISSN 1103-8454 ; 198
Keywords
Emerging-market multinational corporations, reverse knowledge transfer political relationships, expatriate managers, headquarters-subsidiary relationship.
National Category
Business Administration
Research subject
Business Studies
Identifiers
urn:nbn:se:uu:diva-363926 (URN)978-91-506-2730-5 (ISBN)
Public defence
2018-12-06, Hörsal 2 (Lecture Hall 2), Ekonomikum, Kyrkogårdsgatan 10A, Uppsala, 13:15 (English)
Opponent
Supervisors
Available from: 2018-11-08 Created: 2018-10-21 Last updated: 2018-11-12

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