Activity Specific Knowledge Characteristics in the Transfer of Business Activities from Europe to Asia

Purpose: This paper investigates differences in the characteristics of the knowledge, which is most important for the internationalization of key business activities within MNCs to emerging markets such as China and India. Design/methodology/approach: The paper presents a framework based on knowledge management-, innovation-, and internationalization theory, which is developed and exemplified in relation to one case of R&D transfer to India as well as three cases of R&D transfer to China within four globally leading European companies. Findings: The framework and empirical research suggest that a knowledge gap still exists in China and India concerning R&D activities. Distinct differences exist in terms of source - and effability, of the knowledge, which is most important for the internationalization to emerging markets of key business activities within MNCs. The most important knowledge for the internationalization of R&D activities is to a higher extent tacit, than it is for manufacturing activities and local sourcing activities. Furthermore, the source of the most important knowledge for the internationalization of R&D activities, as well as manufacturing activities, within MNCs, is more likely to be the MNC itself, than when marketing activities or local sourcing activities are internationalized to emerging markets. Whether or not the MNC itself is an important source of knowledge for newly established R&D units in China and India, is not exclusively determined by the motives behind the establishment. Originality/value: A model illustrating differences between the most important knowledge for the internationalization of key business activities, in terms of characteristics such as source of the knowledge and effability of the knowledge, is developed