Parents Know Best! How Knowledge Influences Subsidiary Strategy (and Performance)
| Authors | |
|---|---|
| Year of publication | 2017 |
| Type | Article in Proceedings |
| Conference | 18th European Conference on Knowledge Management ECKM 2017 |
| MU Faculty or unit | |
| Citation | |
| Web | https://www.hse.ru/data/2017/09/07/1172509851/ECKM17_Abstract_booklet.pdf |
| Field | Management and administrative |
| Keywords | knowledge transfer; subsidiary; strategy; performance; MNE |
| Description | A company's knowledge assets are considered to be the most important determinant of both expansion and success, which is even more pronounced in foreign markets. A parent company's knowledge assets provide competitive advantages to subsidiaries. While the idea that MNCs can improve the performance of their foreign subsidiaries by utilising MNE knowledge is not new, this paper goes beyond the existing literature by exploring if and how the knowledge transfer from HQ to subsidiary can affect the choice of the subsidiary's strategy, and subsequently, performance. To be able to understand how knowledge transfer influences performance in subsidiaries, it is crucial to understand how the transferred knowledge is used in the subsidiary to affect performance. This article aims to examine the effect of MNE knowledge transfer (from HQ to subsidiary) on subsidiary strategy, and subsequently, on performance. It uses logistic regression to examine a sample of 355 MNE subsidiaries to reveal the relation between the knowledge transfer from headquarters to subsidiary and the strategy pursued by the subsidiary. Subsequently, using ANNOVA and linear regression analysis, strategy-performance relationship is examined to show the moderating effect of knowledge transfer on subsidiary performance. The results show that knowledge transfer is a significant determinant of subsidiary strategy, and, subsequently, performance. |