Knowledge transfer capacity of multinational enterprises and technology acquisition in international joint ventures

This paper examines the impacts of the knowledge transfer capacity of multinational enterprises (MNEs) on the extent to which international joint ventures (IJVs) acquire technology. Although MNEs’ capability to transfer knowledge is a key catalyst for IJVs to learn new information, extant literature currently sheds light on only student's absorptive capacity and neglects teacher's fundamental ability. Of course, there is no doubt that knowledge acquisition is not only determined by knowledge transfer capacity but also highly influenced by absorptive capacity. However, what we suggest here is that knowledge transfer capacity should not be omitted in the discussion of knowledge transfer. We design a series of propositions to test positive relationships between the capability of foreign firms and IJVs’ technology acquisition. Using a sample of IJVs in Korea, the paper contributes to the literature by confirming that IJVs’ learning also significantly depends on some key factors associated with foreign parents’ capabilities. Based on the results, this study also provides some useful implications for MNEs which intend to establish IJVs in foreign markets.