‘Inpatriation’ for knowledge-transfer within Japanese multinational corporations

Abstract

This article uses knowledge management theory and the gravity model to analyse the determinants of ‘inpatriation’ for knowledge-transfer within multinational corporations (MNCs) and the differences in their effects based on the region of the subsidiary’s host country. The empirical analysis uses data collected through a survey of the overseas subsidiaries of Japanese MNCs and finds that factors related to both the countries and the individual MNCs affect inpatriation, with the former factors having a stronger influence than the latter. With regard to the country factors, a smaller geographic distance and a larger cultural distance between the home and host countries and a lower GDP per capita in the subsidiary’s host country increase inpatriation. Regarding the individual MNC factors, a larger subsidiary R&D budget, a larger parent firm and the execution of collaborative R&D projects between a subsidiary and its parent firm increase inpatriation. Additionally, this study finds that in Asia, geographic closeness and low GDP per capita facilitate inpatriation, whereas a relatively small R&D budget and rare collaborative R&D projects with Japan decrease inpatriation. More subsidiaries in Asia send inpatriates to Japan than do subsidiaries in other regions because these positive factors are much stronger than these negative factors.

Keywords:

• Asia
• inpatriation
• gravity model
• Japan
• knowledge-transfer
• R&D

Acknowledgements

I thank two anonymous reviewers for their helpful suggestions.

Notes

1. Chang, Gong, and Peng (2012) show that subsidiaries with low absorptive capacity cannot improve their performance when knowledge is transferred.

2. The following index was built:

I_ij represents the index for the ith cultural dimension and the jth country, V_i is the variance of the index of the ith dimension, p indicates Japan and CDj is the cultural difference between the jth country and Japan (Kogut and Singh 1988, 422).

3. The data were provided by the Hofstede Center, https://www.geert-hofstede.com/nationa-culture.html, retrieved on 18 April 2016.