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The intra-firm knowledge transfer in the outward M&A of EMNCs: Evidence from Chinese manufacturing firms

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Abstract

This paper examines the intra-firm transfer of tacit and explicit knowledge in the post-acquisition integration stage in the outward mergers and acquisitions (M&A) of multinational corporations from emerging economies (EMNCs). It also explores rationales underlying the tacit and explicit knowledge transfer in the cross-cultural context. Drawing from the empirical evidence of three Chinese firms’ outward M&A in three European countries, we argue the Chinese acquiring firms emphasized the transfer of explicit over tacit knowledge in the post-acquisition integration in their outward M&A. This can be attributed to complementarity in explicit knowledge, home market advantage, scarcity of key staff and cultural differences.

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Notes

  1. The term “nature of knowledge” refers to the tacit/explicit knowledge continuum (Michailova & Mustaffa, 2012).

  2. For example, M&A to Japanese firms were excluded in this research.

  3. Interviews with the members of staff of the acquired firms, recommended by their counterparts in the headquarters, were conducted by telephone. It would have been very costly in terms of time and money to travel to the various countries to conduct face-to-face interviews within these acquired firms

  4. Although failing to access the CEO of acquired Firm C, we interviewed his secretary and personal interpreter.

  5. The overall abilities of the Chinese acquirers were examined by the Chinese government through a number of bureaucratic approval procedures before the acquisition, and by the acquired Western firms (Tan & Ai, 2010). This is also the reason why most Chinese acquirers are industry leaders in their domestic market.

  6. Unlike Luo and Wang’s (2012) concept of home country effects which focus on the influence of home country environment parameters, home market advantages in this study also emphasize the impact of the huge Chinese market.

  7. Cultural differences in the paper are on both organizational and national levels. Although organizational culture may include features that are distinctively different from the national cultural characteristics, they are partly embedded in national cultures in international acquisition (Vaara, Sarala, Stahl, & Björkman, 2012). Therefore, both national and cultural differences are wider in EMNCs’ outward M&A.

  8. Both national and cultural differences may create problems for transferring knowledge across units by undermining the relevant absorptive capacities (Van Wijk et al., 2008), because commonalities make it easier to identify, acquire, and assimilate knowledge in the other unit (Cohen & Levinthal, 1990). National cultural differences may undermine the absorptive capacity of Chinese acquirers to a greater extent than organizational cultural differences, due to language issues and related communication problems (Ambos & Ambos, 2009).

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Acknowledgements

We would like to thank Dr. Jing Li and the two anonymous reviewers for their insightful comments and suggestions, which served to improve this article substantially.

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Authors and Affiliations

  1. Faculty of Business and Law, University of Northampton, Northampton, NN2 7AL, UK

    Qi Ai

  2. College of Public Administration, Huazhong University of Science and Technology, Wuhan, Hubei, 430074, China

    Qi Ai

  3. School of Management, Royal Holloway, University of London, Egham, Surrey, TW20 0EX, UK

    Hui Tan

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  1. Qi Ai
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Correspondence to Qi Ai.

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Dr. Hui Tan is also a visiting professor of Hubei University of Economics, Wuhan, China.

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Ai, Q., Tan, H. The intra-firm knowledge transfer in the outward M&A of EMNCs: Evidence from Chinese manufacturing firms. Asia Pac J Manag 35, 399–425 (2018). https://doi.org/10.1007/s10490-017-9518-z

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