Influences of Absorptive capacity and Social capital on Reverse Knowledge Transfer

This paper investigates the effects of absorptive capacity (i.e., possession of prior related knowledge and willingness to learn) of multinational corporations (MNCs) and social capital (i.e., communication, trust, and organizational cultural similarity) between MNCs and foreign subsidiaries on Reverse Knowledge Transfer (RKT). A database of 228 MNCs operating in Korea and have foreign subsidiaries through Foreign Direct Investment (FDI) was collected by survey. This empirical study proves that the willingness to learn, trust and organizational cultural similarity are the most key factors for a successful RKT. Furthermore, the results demonstrate that communication is also significant factor in the absence of absorptive capacity. In contradiction of previous studies, possession of prior related knowledge has no significant impact on the RKT.