Knowledge Outflows from Foreign Subsidiaries: The Tension between Knowledge Creation and Knowledge Protection

48 Pages Posted: 26 Nov 2012 Last revised: 29 Oct 2013

See all articles by Alessandra Perri

Alessandra Perri

Ca Foscari University of Venice - Department of Management

Ulf Andersson

Copenhagen Business School - Department of Strategic Management and Globalization; Uppsala University - Department of Business Studies

Date Written: October 30, 2012

Abstract

This paper analyzes the MNC subsidiaries' trade-off between the need for knowledge creation and the need for knowledge protection, and relates it to the extent of knowledge outflows generated within the host location. Combining research in International Business with Social Theory, we find that subsidiaries that extensively draw on external knowledge sources are also more likely to generate knowledge outflows to local firms. We argue that this may be explained by the subsidiaries’ willingness to build the trust that facilitates the establishment of reciprocal knowledge linkages. However, when the value of the subsidiary's knowledge stock is very high, the need for knowledge protection restrains reciprocity mechanisms in knowledge exchanges, thus reducing the extent of knowledge outflows to the host location. This study contributes to the literature on the firm-level antecedents of FDI-mediated local knowledge outflows, as well as to the broad IB literature on the relationship between subsidiaries and their host regions. The implications for managers and policy-makers are also discussed.

Keywords: local knowledge outflows, FDI, knowledge creation, knowledge protection

JEL Classification: O32, M16

Suggested Citation

Perri, Alessandra and Andersson, Ulf, Knowledge Outflows from Foreign Subsidiaries: The Tension between Knowledge Creation and Knowledge Protection (October 30, 2012). Department of Management, Università Ca' Foscari Venezia Working Paper No. 18/2012, Available at SSRN: https://ssrn.com/abstract=2168744

Alessandra Perri (Contact Author)

Ca Foscari University of Venice - Department of Management ( email )

San Giobbe
Cannaregio 873
Venice, 30121
Italy

Ulf Andersson

Copenhagen Business School - Department of Strategic Management and Globalization ( email )

Porcelænshaven 24
Frederiksberg, 2000
Denmark

Uppsala University - Department of Business Studies ( email )

Box 513
SE 751 20 Uppsala
Sweden

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
31
Abstract Views
676
PlumX Metrics