The dual role of subsidiary autonomy in intra-MNC knowledge transfer

Purpose The purpose of this chapter is to explore the effect of subsidiary autonomy on intra-MNC knowledge transfers during captive R&D offshoring to emerging markets. Design/methodology/approach: A framework to this end is outlined and illustrated in relation to four cases of captive R&D offshoring to emerging markets. Findings Subsidiary autonomy has a mainly negative effect on primary knowledge transfer and a mainly positive effect on reverse knowledge transfer. Newly established R&D subsidiaries in emerging markets need primary knowledge transfer in order to build up their competence before they can add to the knowledge level of the MNC. Gradual increase in R&D subsidiary autonomy is thereby beneficial for subsidiary innovation performance.