Knowledge Transfer From MNC Parent To China Subsidiary

Journal of World Business 39 (2004) 168–182

An integrated model of knowledge transfer from
MNC parent to China subsidiary
Pien Wanga,*, Tony W. Tongb, Chun Peng Kohc a School of Business, National University of Singapore, 1 Business Link, Singapore 117592, Singapore b Fisher College of Business, The Ohio State University, Newark, OH, USA c International Enterprise Singapore, Singapore

Abstract
Based on an empirical study of 62 firms, this paper develops a two-stage model describing knowledge transfer from MNCs to their China subsidiaries. In the first stage, the model proposes factors affecting the extent of knowledge contributed by an MNC to its China subsidiary. In the second stage, the model proposes factors affecting the extent of knowledge acquired by the China subsidiary from its MNC parent. Knowledge contributed by the parent to the subsidiary is affected by two groups of factors: parent’s capacity to transfer knowledge and parent’s willingness to transfer knowledge. Holding constant knowledge contributed by the parent, knowledge acquired by the subsidiary from its parent is determined by two groups of factors: subsidiary’s capacity to acquire knowledge and subsidiary’s intent to acquire knowledge. Implications for future research and management practitioners are discussed.
# 2003 Elsevier Inc. All rights reserved.
Keywords: Knowledge transfer; MNC parent; China subsidiary

Among all the resources of a firm, knowledge is the most strategically important resource (Grant, 1996).
Knowledge provides the capacity for organizational action and new knowledge provides the capacity for organizational renewal (Inkpen, 1998). However, the knowledge base of young subsidiaries established by multinational corporations (MNCs) in transition economies is weak (Lyles & Salk, 1996). Thus without successful knowledge transfer from their MNC parents, it is difficult for these subsidiaries to build up knowledge base, improve capabilities, accelerate
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Corresponding author.

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