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Management International Review
Published in: Management International Review 2/2015

01-04-2015 | Research Article

Reverse Knowledge Transfer from Overseas Acquisitions: A Survey of Indian MNEs

Authors: Smitha R. Nair, Mehmet Demirbag, Kamel Mellahi

Published in: Management International Review | Issue 2/2015

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Abstract

In this paper, we examine the effects of subsidiary level factors on reverse knowledge transfer (RKT) in MNEs from the emerging market of India (EM-MNEs). We argue that subsidiary level competencies and capabilities play a vital role in persuading the parent EM-MNEs to initiate the RKT in their attempt to overcome the disadvantages they have. The competency levels of the subsidiary have been captured in terms of the role that the subsidiary has in the network and its host country endowments. In addition, RKT requires the subsidiary units to collaborate closely with the parent EM-MNEs and is also dependent on the extent of complexity of this knowledge. The study involves a survey of MNEs from the emerging market of India with overseas acquisitions. We develop a set of hypotheses and test them with the data using OLS regression. Results show that higher levels of collaboration facilitate RKT to the parent firm, and this effect is more prominent in high technology and knowledge intensive industries. Also, subsidiaries that hail from host countries with a higher competitive index compared to India and those that perform the role of specialised contributors contribute more towards RKT. In addition, a higher level of knowledge complexity leads to a greater extent of RKT.
previous article What Drives Overseas Acquisitions by Indian Firms? A Behavioral Risk-Taking Perspective

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Appendix
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Footnotes
1
Weaknesses external to the firm are underdeveloped markets, unsophisticated customers, weak suppliers, and other input scarcities, infrastructure bottlenecks and institutional voids. Weaknesses internal to the firm are limited global exposure, lower technological and managerial standards, inadequate resources and capabilities, lack of credibility and legitimacy (Madhok and Keyhani 2012).
 
2
Age, revenue figures (2010–2011), profit-loss figures (2010–2011).
 
3
Federation of Indian Chambers of Commerce and Industry.
 
4
Supplemented also with Grant Thornton, 2010; IBEF, 2006; Mape, 2006; BCG, 2009; Grant Thornton (M&A) Dealtrackers 2005–2010.
 
5
We would like to thank an anonymous referee for this helpful suggestion. From the FICCI list of India M&As (secondary data) and based on the information in the company websites and press releases of these acquisitions, we arrived at a qualitative judgment on the subsidiary mandate for 60 of these acquisitions (chosen randomly). It was seen that based on this exercise, 23 % of the subsidiaries had a world mandate, 32 % were local implementers and 45 % were strategic contributors. This is not very different from the pattern seen in the choice of subsidiaries by our respondents.
 
6
Based on the 12 pillars of Institution, Infrastructure, Macroeconomic environment, Health and primary education, Higher education and training, Goods market efficiency, Labor market efficiency, Financial market development, Technological readiness, Market size, Business sophistication, Innovation.
 
7
It has been developed by the OECD and Eurostat (available on the web at http://​ec.​europa.​eu/​environment/​emas/​pdf/​general/​nacecodes_​en.​pdf).
 
8
European Technical Centre in UK (2005), INCAT International in UK (2005) and Jaguar & Land Rover in UK (2008).
 
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Metadata
Title
Reverse Knowledge Transfer from Overseas Acquisitions: A Survey of Indian MNEs
Authors
Smitha R. Nair
Mehmet Demirbag
Kamel Mellahi
Publication date
01-04-2015
Publisher
Springer Berlin Heidelberg
Published in
Management International Review / Issue 2/2015
Print ISSN: 0938-8249
Electronic ISSN: 1861-8901
DOI
https://doi.org/10.1007/s11575-015-0242-y

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