Subsidiaries Will Diffuse Knowledge within MNEs, or Not?

Abstract This study aims to discuss whether subsidiaries are willing to share what they learn from local actors with internal actors within MNE. We focus on examining both internal (e.g. HQ's strategies and subsidiary's internal characteristics) and external impacts on subsidiary’s knowledge diffusing behaviours. The online survey for R&D managers in 15 European countries was carried out for analyzing these research topics. We apply regression models and a full structural equation model (SEM) by LISREL for empirical analysis. The results show that subsidiary’s internal position of R&D importance encourages them to diffuse more knowledge for the whole MNEs. The external factors in local advantages helps subsidiaries to shape their role in the knowledge sharing procedure in different ways. However, the internal HQ’s initial assignments make less influence on knowledge diffusion. Key words subsidiary, knowledge diffusion, locational factors, R&