Knowledge Transfer Capacity: Implications for the Theory of the Multinational Corporation

Journal of International Business Studies, Vol. 34, 2006

Posted: 8 May 2006

See all articles by Xavier Martin

Xavier Martin

Tilburg University

Robert M. Salomon

New York University (NYU) - Department of Management and Organizational Behavior

Abstract

This study updates and extends research on foreign entry modes by examining the impacts of knowledge transfer capacity and knowledge tacitness. Research on international corporate expansion has long emphasized that deploying intangible knowledge-based assets is required for successful international expansion. More recently, research from a "knowledge-based" perspective has addressed the role of tacitness in constraining a firm's ability to transfer knowledge internationally. We combine these perspectives to describe how knowledge tacitness affects the relative suitability of four archetypal entry modes: exporting, licensing, establishing an alliance, or wholly-owned entry. We then focus on a relatively under-studied firm characteristic, knowledge transfer capacity. We offer predictions that describe the combined effects of knowledge tacitness and transfer capacity on entry mode choice. We distinguish between the transfer capacity of the organization that develops knowledge (source transfer capacity) and that of the organization that seeks to access that knowledge (recipient transfer capacity). The discussion addresses how our model generalizes to knowledge-seeking strategies and to the study of ongoing multinational networks. The study enriches and reconciles multiple theoretical perspectives on entry strategy, and brings together the study of knowledge characteristics and firm heterogeneity in the theory of the multinational corporation.

Keywords: knowledge transfer capacity, technological capability, tacitness, theory of the multinational corporation, entry mode, international corporate expansion

JEL Classification: F00, F21, F23, L20, L22, M10, M20, O32, O33, O34

Suggested Citation

Martin, Xavier and Salomon, Robert M., Knowledge Transfer Capacity: Implications for the Theory of the Multinational Corporation. Journal of International Business Studies, Vol. 34, 2006, Available at SSRN: https://ssrn.com/abstract=899992

Xavier Martin

Tilburg University ( email )

Postbus 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

Robert M. Salomon (Contact Author)

New York University (NYU) - Department of Management and Organizational Behavior ( email )

44 West 4th Street
New York, NY 10012
United States

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