The Role of Expatriates in Facilitating Knowledge Transfer to Foreign Affiliates

Rene Belderbos, Shinya Suzuki, Hiroyuki Okamuro and Kazuhiro Asakawa

No HIAS-E-160, Discussion paper series from Hitotsubashi Institute for Advanced Study, Hitotsubashi University

Abstract: Multinational enterprises (MNEs) find it challenging to transfer technological knowledge to their overseas affiliates, as this transfer requires the exchange of tacit knowledge and because technological knowledge may spill over to local rivals. The use of expatriate employees may help MNEs to address these challenges, aiding in the transfer process and ensuring tighter control of this transfer. In this paper we examine under which conditions the assignment of expatriates to foreign affiliates is associated with higher levels of technology transfer by the MNE to those affiliates. Drawing on rich micro data on Japanese MNEs and their foreign affiliates, 2013-2022, affiliate fixed effect analysis confirms that expatriates facilitate knowledge transfer to foreign affiliates in particular for small and medium sized MNEs, MNEs that are technology leaders, and when an affiliate is minority-owned by the MNE or is facing rising geopolitical risks in the host country.

Keywords: Multinational Enterprise (MNE); Small and Medium sized Enterprise (SME); expatriates; foreign affiliates; technology transfer (search for similar items in EconPapers)
Pages: 33 pages
Date: 2026-03-24
New Economics Papers: this item is included in nep-cse and nep-iaf
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