Reverse knowledge transfer and internationalization strategy: Cases from Japanese MNCs in Indonesia

Abstract

With the continuing trend for a firm to acquire knowledge from different locations, many multinational firms realize the urgency of tapping knowledge from their subsidiaries worldwide. The study of reverse knowledge transfer plays an essential role in gaining a global competitive advantage. Based on a case study and comparative analysis of research from two Japanese MNCs in Indonesia, we observe a unique mechanism of reverse knowledge transfer in highly centralized societies. We identify that the pattern of reverse knowledge transfer from subsidiaries to headquarters is evolving along the different phases of the internationalization process. Our study concludes that several variables influence different reverse knowledge transfer mechanisms at different internationalization stages. Those variables are product localization, degree of autonomy, external embeddedness, and knowledge specificity.