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Low-Level Management Control and Cross-Border Knowledge Transfer of Emerging Economy Firms

Chang Liu

Zijie Li

Yi Li

Lin Cui

Emerging Market Firms in the Global Economy

ISBN: 978-1-78441-066-7, eISBN: 978-1-78441-065-0

Publication date: 11 November 2014

Abstract

Purpose

This paper seeks to provide an understanding of the relationship between the management control policy of emerging economy (EE) firms and the knowledge transfer with the acquired firm, as well as the mechanism by which specific management control policy facilitates knowledge transfer with the acquired firms.

Design

Employing an organizational learning theory, this paper examines the knowledge transfer from acquired firms to acquiring EE firms through multiple-case study of three EE firms.

Findings

Based on organizational learning theory and the results of case studies, this paper finds that the cooperation and willingness of employees in the acquired firm and language barriers are the main factors influencing the relationship between management control policy and the parent company’s knowledge transfer process.

Research implication

This study sheds light on cross-border knowledge transfer to EE firms from an organizational learning perspective and broadens the understanding of post-acquisition knowledge transfer in an emerging market context.

Practical implications

This study suggests that the low-level management control facilitates knowledge transfer from acquired firms. This is especially true when the parent company from the EE has limited learning experience and faces substantial language barriers between itself and its acquired firm.

Originality

This paper extends existing research by exploring how low-level control of acquired firms in developed markets facilitates knowledge transfer of EE firms after cross-border acquisition. Future research can extend this line of research by examining the knowledge transfer mechanism of EE firms through qualitative and quantitative methods.

Keywords

Acknowledgements

Acknowledgment

This research was supported by the Program for Excellent Talents, UIBE, and the UIBE Networking and Collaboration Center for China’s Multinational Business. The authors would like to express appreciation for the editor’s guidance and constructive comments.

Citation

Liu, C., Li, Z., Li, Y. and Cui, L. (2014), "Low-Level Management Control and Cross-Border Knowledge Transfer of Emerging Economy Firms", Emerging Market Firms in the Global Economy (International Finance Review, Vol. 15), Emerald Group Publishing Limited, Leeds, pp. 97-120. https://doi.org/10.1108/S1569-376720140000015005

Publisher

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Emerald Group Publishing Limited