Innovation, Organizational Learning Orientation and Reverse Knowledge Transfer in Multinationals Companies

Abstract

Abstract: Today, innovation is considered one of the main source of competitive advantage for the companies. For multinationals companies (MCNs) innovation is particularly important because they have more challenges to face than domestic organizations. MNCs have also a potential advantage for developing innovations, as they have access to new ideas and knowledge generating in the different locations they operate in. But this potential advantage can only become real if MNCs are able to transfer the knowledge they acquire in one of their locations to the others. This paper analyses the relationship between knowledge transfer and innovation in MNCs. In particular, this research focuses on knowledge transfer from the subsidiaries to the headquarters (reverse knowledge transfer). In addition, this paper studies the effect of the firm´s learning orientation as a mediator in the relation between reverse knowledge transfer and innovation. These relationships are tested using a sample of 104 Spanish MNCs. Our findings show that reverse knowledge influences indirectly on the headquarters’ innovation through its effect on the firm’s learning orientation. These findings have implications for both academics and practitioners.