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Reverse international knowledge transfer in the MNE: (where) does affiliate performance boost parent performance?

journal contribution
posted on 2023-06-09, 02:28 authored by Nigel Driffield, James H Love, Yong Yang
We examine the extent to which the knowledge or technological capability of foreign affiliates actually enhances the performance of their parent companies. Our results draw on a firm-level panel of more than 1600 multinationals and more than 4000 of their overseas affiliates, covering 46 home and host countries. We find considerable evidence of enhanced parent productivity as a result of their affiliates’ performance, which we interpret as evidence of reverse knowledge transfer from affiliates to parents. This effect is robust to different tests including IV estimation and a falsification exercise based on unconnected ‘matched’ affiliates. We find that both physical and strategic location markedly affects the affiliate-parent relationship, and that distance reduces the positive impact that affiliate performance has on that of the parent.

History

Publication status

  • Published

File Version

  • Published version

Journal

Research Policy

ISSN

0048-7333

Publisher

Elsevier

Issue

2

Volume

45

Page range

491-506

Department affiliated with

  • Business and Management Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2016-08-10

First Compliant Deposit (FCD) Date

2021-03-05

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