Subsidiary autonomy and knowledge transfer

Purpose: This paper aims to explore the effect of subsidiary autonomy on knowledge transfers during captive offshoring to emerging markets. Design/methodology/approach: Five longitudinal cases of captive R&D and manufacturing offshoring to emerging markets. Findings: The propositions entail the dual effect of operational subsidiary autonomy on primary knowledge transfer and reverse knowledge transfer. For newly established subsidiaries, operational subsidiary autonomy has a mainly negative effect on primary knowledge transfer and a mainly positive effect on reverse knowledge transfer and local collaboration activities increase this effect. Strategic subsidiary autonomy is mainly negative for primary and reverse knowledge transfer. Research limitations/implications: Limitations concerning the applied exploratory case study approach suggest that further research should test the identified relationships using surveys, after the initial pilot study. Practical implications: A gradual increase of operational subsidiary autonomy as the subsidiary capability level increases is beneficial to ensure primary knowledge transfer. Allowing subsidiaries to collaborate locally within the confines of their mandates benefits reverse knowledge transfer. Originality/value: This paper extends the secondary knowledge transfer concept to include knowledge flows with local collaboration partners, not only other subsidiaries and clarifies the distinction between operational and strategic autonomy concerning local collaboration. A subsidiary asserts operational autonomy when its collaboration with local partners relates to its existing mandate. A subsidiary asserts strategic autonomy when it collaborates with local partners beyond this mandate.