A Framework for Research and Practice: Relationship between Expatriate Knowledge Transfer, Subsidiary Absorptive Capacity, and Subsidiary Performance

Abstract

It plays an important role in establishing and maintaining competitive advantages in multinational corporations (MNCs). MNCs transfer knowledge among parent corporations and foreign subsidiaries. While multinational firms tend to send outstanding expatriates to foreign subsidiaries to transfer knowledge. In this study, we theoretically indentify three dimensions during the knowledge transfer among expatriates and local staff: ability, motivation and seeking for the opportunities to transfer knowledge. Then we integrate the ability-motivation-opportunity with the absorptive capacity of corporations. The result shows that knowledge transfer from expatriates has indirect impact on performances of foreign subsidiaries, which will be stronger as the absorptive capacity of corporation becomes stronger.