The performance effects of vertical and horizontal subsidiary knowledge outflows in multinational corporations

Catia Fernandes Crespo, David A. Griffith, Luís Filipe Lages

Research output: Contribution to journalArticle

20 Citations (Scopus)

Abstract

Horizontal and vertical subsidiary knowledge outflows in multinational corporations (MNCs) are argued to be central to effective MNC performance. Building on the knowledge-based view of the firm, we develop a conceptual model to investigate the performance consequences, determinants and interaction effects due to coordination and control mechanisms, of horizontal and vertical MNC subsidiary knowledge outflows. The hypotheses are empirically tested with a dataset comprised of survey and archival data from over 200 MNC subsidiaries. Results indicate that explicitness and communication positively influence vertical and horizontal subsidiary knowledge outflows and that national cultural distance, centralization, formalization, and specialized resources moderate these influences. We also find that knowledge outflows to headquarters and to peer subsidiaries enhance an MNC's financial performance (i.e., return on assets). The results provide substantive evidence as to how vertical and horizontal knowledge operate within MNCs. (C) 2014 Elsevier Ltd. All rights reserved.
Original languageEnglish
Pages (from-to)993-1007
JournalInternational Business Review
Volume23
Issue number5
DOIs
Publication statusPublished - 1 Oct 2014

Keywords

  • Knowledge outflows
  • Multinational corporations
  • Subsidiaries

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