How Does Knowledge Transfer from Foreign Subsidiaries Affect Parent Companies' Innovative Capacity

Lucia Piscitello and Larissa Pabbiosi

No 06-22, DRUID Working Papers from DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies

Abstract: The paper addresses reverse knowledge transfer (RKT) from foreign subsidiary to parent company. Specifically, it aims at investigating to what extent the effectiveness of such a transfer is influenced by: (i) the organizational mechanisms employed for transferring knowledge; (ii) the subsidiary’s role, its autonomy, and its relationships with the local context. The empirical analysis considers 162 transfers of best practices possessed by foreign subsidiaries and transferred back to their Italian parent companies. Results confirm that the impact of RKT on the parent company’s innovativeness is greater when: (i) person-based mechanisms are employed for transferring knowledge; (ii) subsidiaries are competence-creating; and (iii) knowledge developed by subsidiaries benefits from local external linkages.

Keywords: External linkages; organizational mechanisms; parent company's innovativeness; reverse knowledge transfer, subsidiary’s characteristics (search for similar items in EconPapers)
JEL-codes: F23 O39 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-cse, nep-ino, nep-ipr, nep-pr~ and nep-knm
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:aal:abbswp:06-22

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