Globalization and Innovation with the Role of Knowledge Transfer Across Borders

Abstract

Globalization has complicated the MNC system, making cross-border knowledge transfer an important impetus of MNC innovation performance. Although theories generally agree that knowledge sharing has a positive influence on innovation performance, limited studies have explored the moderating effects of cultural, institutional, and technological factors on the knowledge transfer-innovation relationship. Therefore, this research aimed to investigate the influence of knowledge transfer mechanisms on the innovation performance in MNCs and the moderating roles of cultural distance and technological infrastructure in this relationship. This research was carried out using a quantitative research design, integrating survey data obtained from 180 subsidiaries in 12 countries with patent data and innovation indices. Key knowledge transfer mechanisms, innovation output, and moderating factors were operationalized, while regression and SEM were employed to identify the direct and moderated impacts. Besides, network analysis was utilized to investigate knowledge flow between subsidiaries. The results of the regression model indicate that knowledge transfer exerts a significant positive impact on innovation output (β = 0.482, p < 0.001). The SEM results reaffirm the direct effect, and the moderating effects of cultural distance and technological infrastructure were significant; cultural distance exerts a significant negative moderating impact on the knowledge transfer-innovation relationship (β = -0.174, p < 0.001), whereas technological infrastructure exerts a significant positive moderating effect (β= 0.256, p < 0.001). Comparing various subsidiaries, the innovative level of subsidiaries with effective knowledge-sharing practices and a technologically  well-prepared system is higher. In conclusion, effective cross-border knowledge transfer exerts a positive effect on the innovation performance of MNCs; therefore, managers should adopt  well-organized strategies to realize the knowledge-sharing system, overcoming the barriers of culture and technology. Future studies should also consider the impact of longitudinal design and industry-specific analysis for deeper insights into context impacts.