The Impact of Origins of Reverse Technology Transfer on MNC Home-Country Product Development

Sean T. Hsu, Akie Iriyama

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

Reverse technology transfer (the transferring of multinational corporation [MNC] subsidiaries’ technological knowledge to their home country) deserves more executive attention since the source of competitive advantage of MNCs resides in their capabilities to leverage knowledge from different units across borders. This article examines three salient “origins” of reverse technology transfer—headquarters, local constituents, and subsidiary research and development (R&D) activity—and their impact on MNCs’ home-country product development. We argue that reverse technology transfer from subsidiary R&D activity is more likely to have a positive impact on MNC home-country product development than the other two origins because reverse transfer from local constituents requires high integration cost, and transfer from headquarters adds little technological novelty. We also develop two contingency hypotheses for the latter two origins to increase their likelihood of positive impacts on home-country product development. Using a data set of 1,331 Taiwanese MNCs, our empirical evidence provides two important messages to managers: (1) a subsidiary whose technology mainly relies on its R&D would be an ideal target for reverse transfer; and (2) reverse transfer from local constituents and headquarters can be effective when they fit with an appropriate organizational mechanism, such as governance mode and absorptive capacity.

Original languageEnglish
Pages (from-to)411-424
Number of pages14
JournalThunderbird International Business Review
Volume58
Issue number5
DOIs
Publication statusPublished - 2016 Sep 1

Keywords

  • HQ-subsidiary relationship
  • Product development
  • Reverse knowledge transfer
  • Subsidiary knowledge sourcing
  • Technology Sourcing

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Political Science and International Relations
  • Business and International Management

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