Impact of dimensions of absorptive capacity on multinationals' reverse knowledge transfer: from an Indian context

Purpose: The purpose of this study is to provide a holistic view of how the different dimensions of absorptive capacity (AC) impact reverse knowledge transfer (RKT). Although the importance of AC has been realized in knowledge and RKT literature, scholars have hardly explored the differentiated importance of each component of AC. When knowledge leads to competitive advantage, understanding the differentiated contribution will help enhance the impact of AC on RKT. This becomes even more important for emerging economy multinationals (EMNCs), which struggle in the global market and suffer from various liabilities. Therefore, this study focuses on the multidimensional impact of AC on RKT from Indian multinational subsidiaries based in developed nations to their parent firm. Design/methodology/approach: This study is a quantitative study. The authors tested the research model using a structural equation modeling design based on survey data collected from subsidiaries (in developed economies) of Indian multinationals. Findings: The results show that acquisition, assimilation and transformation components of AC have positive impact on RKT. However, the authors found that the exploitation dimension has no impact on RKT. Originality/value: To the best of the authors’ knowledge, the research design is original and this is the first study on the impact of all components of AC on RKT. AC is one of the most widely researched variables in knowledge literature, including different versions of Zahra and George’s concept of AC. However, its impact has not been explored much in RKT literature. This study addresses this gap and extends the literature on AC and RKT. The advantages of this study can be seen at the team and organization level.