City Research Online

Abstract

This study examines how multinational corporation (MNC) knowledge management mechanisms (systems, coordination and socialization) and international exposure affect MNC headquarters' absorptive capacity (AC). We build on Cohen and Levinthal's (Admin Sci Quart 35(1):128–152, 1990, https://doi.org/10.2307/2393553) under-researched trade-off between the inward- and outward-looking drivers of AC in the context of the MNC international knowledge transfer. First, we hypothesize that knowledge management mechanisms (the inward-looking driver) and international exposure (the outward-looking driver) directly influence headquarters' AC. Our findings from a sample of 106 Brazilian and Portuguese MNC headquarters support this view. Second, because "not-invented-here" syndrome and distance can affect knowledge flows from subsidiaries, we develop a hypothesis on the trade-off between AC's inward- and outward-looking drivers. We observe that their impact on the AC of MNC headquarters is diminished for high levels of coordination mechanisms and international exposure. Hence, coordination mechanisms become less effective to absorb subsidiary knowledge as the MNC increases its international footprint. We also conclude that the headquarters of highly internationalized MNCs can regard socialization mechanisms as facilitators of the absorption of knowledge generated by subsidiaries.

Publication Type:	Article
Additional Information:	This version of the article has been accepted for publication, after peer review and is subject to Springer Nature’s AM terms of use, but is not the Version of Record and does not reflect post-acceptance improvements, or any corrections. The Version of Record is available online at: https://doi.org/10.1007/s11575-022-00474-1
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Departments:	Bayes Business School > Management
SWORD Depositor:	Symplectic Administrator

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