Determinants of Cross-National Knowledge Transfer and Its Effect on Firm Innovation

Introduction

The purpose of this paper is to summarize the research study conducted by Masaaki Kotabe in regards of the determinants of cross-national knowledge transfer and its effect on firm innovation. In this paper, I will first cover the business research and its purpose.Then I will present explaination of the research problems under investigation. The parties involved in conducting the research will be indentified in the next step. Finally I will describe the methods used to conduct the research project.

Business research and its purpose

The determinants of international knowledge flow is the research topic examined in the study. From a resource-based perspective, the study evaluates the impact of cross-national knowledge transfer on firm innovative performance. The search topic is worthy of empirical investigation because it reaffirms the notion that firm are able to maximize innovative output when they renew their capibilities by transferring, sourcing, combining and integrating innovative knowledge not from the reallocation of capital and other assets, but through the transferring or sourcing of knowledge from strategically advantageous international locations (Bresnman et al., 1999). The test conducted in the research focused on US patent data in a single industry, the US pharmaceutical industry.

Business problems under investigation

In his study, Kotabe wanted to reaffirm the notion that firms are able to maximize innovative output when they renew their capabilities by transferring, sourcing, combining and intergrating innovative knowledge not from the reallocation of capital but through the transferring knowledge from advantageous international locations (Bresnman et al., 1999). The counter-argument stated in the study is that cumulative and path independence of innovation lead to risk of "lock in" into technological and instituational cul-de-sacs (Michie, 1998). The result of the study showed that while many organizations recognize that global intergrated sourcing strategies offer pontential gains in performance, few have well-developed processes put in place.

Parties involved in conducting the research

The underlying theory of the study's framework is the resource-based view of the firm (Wernerfelt, 1984), where strategic resources like patents, know-how and strong reputations serve as a powerful differentiation from competitors (Barney, 1991). The study was developed under a theoretical work around 6 hypothesis that suggests that the benefits from international knowledge integration are realized to the extent a firm can successfully deal with the accompanying knowledge complexity and coordination problems. The central hypothesis of the study is based on the relationship between international knowledge transfer and innovative performance is nonlinear,